Road To Serfdom

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THE ROAD
TO SERFDOM

By the same author : —

PRICES AND PRODUCTION
1931, Second, revised and enlarged edition,
IQ3S-

George Routledge & Sons, Ltd.

MONETARY THEORY AND THE
TRADE CYCLE

1933 (translated from the German edition
of 1929)

Jonathan Cape, Ltd.

COLLECTIVIST ECONOMIC
PLANNING

(With E. Barone, G Halm, L. v. Mises
and N. G. Pierson) 1935

George Routledge & Sons, Ltd.

MONETARY NATIONALISM AND
INTERNATIONAL STABILITY
1937

Longmans, Green £? Co.

PROFITS, INTEREST AND
INVESTMENT
1939

George Routledge & Sons, Ltd,

THE PURE THEORY OF CAPITAL
1941

Macrmllan & Co., Ltd.

THE ROAD
TO SERFDOM

by

F. A. HAYEK

It is seldom that liberty of any kind is lost all
at once, ,

David Hume.

I should have loved freedom, I believe, at all times,
but in the time in which we live I am ready to
worship it.

A. de Tocqueville.

LONDON

GEORGE ROUTLEDGE & SONS LTD.

BROADWAY HOUSE : 68-74 CARTER LANE, E.C.

First Published .... March 1944

Reprinted April 1944

Reprinted June 1944

Reprinted Popular Edition ■ October 1944

Reprinted April 1945

Reprinted July 1945

TO

The Socialists
of

All Parties

THIS BOOK IS PRODUCED IN COMPLETE
CONFORMITY WITH THE AUTHORISED
ECONOMY STANDARDS

Printed in Great Britain by Butler & Tanner Ltd., Frome and London

PREFACE

WHEN a professional student of social affairs writes a political
book, his first duty is plainly to say so. This is a political book.
I do not wish to disguise this by describing it, as I might perhaps
have done, by the more elegant and ambitious name of an essay
in social philosophy. But, whatever the name, the essential
point remains that all I shall have to say is derived from certain
ultimate values. I hope I have adequately discharged in the
book itself a second and no less important duty : to make it clear
beyond doubt what these ultimate values are on which the whole
argument depends.

There is, however, one thing I want to add to this. Though
this is a political book, I am as certain as anyone can be that the
beliefs set out in it are not determined by my personal interests.
I can discover no reason why the kind of society which seems
to me desirable should offer greater advantages to me than to the
great majority of the people of this country. In fact, I am always
told by my socialist colleagues that as an economist I should
occupy a much more important position in the kind of society
to which I am opposed— provided, of course, that I could bring
myself to accept their views. I feel equally certain that my
opposition to these views is not due to their being different from
those with which I have grown up, since they are the very views
which I held as a young man and which have led me to make the
study of economics my profession. For those who, in the cur-
rent fashion, seek interested motives in every profession of a
political opinion, I may, perhaps, be allowed to add that I have
every possible reason for not writing or publishing this book. It
is certain to offend many people with whom I wish to live on
friendly terms ; it has forced me to put aside work for which
I feel better qualified and to which I attach greater importance
in the long run ; and, above all, it is certain to prejudice the
reception of the results of the more strictly academic work to
which all my inclinations lead me.

If in spite of this I have come to regard the writing of this
book as a duty which I must not evade, this was mainly due to
a peculiar and serious feature of the discussions of problems
of future economic policy at the present time, of which the
public is scarcely sufficiently aware. This is the fact that the
majority of economists have now for some years been absorbed
by the war machine, and silenced by their official positions, and
that in consequence public opinion on these problems is to an
alarming extent guided by amateurs and cranks, by people who

v

VI

PREFACE

hive an axe to grind or a pet panacea to sell. In these circum-
stances one who still has the leisure for literary work is hardly
entitled to keep to himself apprehensions which current tenden-
cies must create in the minds of many who cannot publicly
express them — though in different circumstances I should have
gladly left the discussion of questions of national policy to those
who are both better authorised and better qualified for the task.

The central argument of this book was first sketched in an
article entitled “ Freedom and the Economic System,” which
appeared in the Contemporary Review for April, 1938, and was
later reprinted in an enlarged form as one of the “ Public Policy
Pamphlets ”, edited by Professor H. D. Gideonse for the Uni-
versity of Chicago Press (1939). I have to thank the editors and
publishers of both these publications for permission to reproduce
certain passages from them.

London School of Economics,

Cambridge, December, 1943

CONTENTS

Introduction

Chapter I. The Abandoned Road .....

Human will has made the world what it is — The individualistic basis
of modem civilisation — Liberalism not a stationary creed — But it has
not been allowed to develop and was abandoned — Germany as the
leader in the new departure.

Chapter II. The Great Utopia

The socialist promise of a new liberty — Change in the meaning of
the word liberty — The renewed apprehensions — The utopia of demo-
cratic socialism.

Chapter III. Individualism and Collectivism

The meaning of socialism — The meaning of “ planning ” — The
alternative to a directed economy not laissez faire but a rational frame-
work for competition — Combinations of central direction and com-
petition inferior to either system.

Chapter IV. The “ Inevitability ” of Planning

Competition not made impossible by technological changes — The
causes of the growth of monopolies — New problems created by
technological changes — Technological possibilities that cannot be
realised under competition— -The demand for planning largely a result
of the narrow view of the specialist.

Chapter V. Democracy and Planning ....

Central direction of economic activity presupposes a comprehensive
common code of values — Individual and social ends — Agreement on
methods and disagreement on ends — As the scope of state action
extends, the possibility of agreement diminishes — The illusion of
democratic “ control ” — Freedom and not democracy the ultimate
value.

. Chapter VI. Planning and the Rule of Law .

The Rule of Law — -Formal and substantive rules — The rationale of
the Rule of Law — The conflict between formal and substantive equality
— The new threat to the Rule of Law — The Rule of Law and the Rights
of Man.

Chapter VII. Economic Control and Totalitarianism

Political and economic freedom — The contempt for the merely
economic — Control over production gives control over consumption —
Planning and the choice of occupation — Orders and prohibitions the
only alternative to the price system — The myth of plenty — The unpre-
cedented extent of totalitarian control.

Chapter VIII. Who, Whom ?

Liberty and property. — Planning and the distribution of incomes —
Distributive justice — “ Equality ” — “ Just ” prices and “ fair ”
wages — The conflicting ideas about the appropriate status — Socialism
prepared the instruments of totalitarian control — “ Middle-class ”
socialism — The conflict between competing socialisms.

vii

PAGE

I

8

18

24

32

42

54

66

76

Vlll

CONTENTS

Chapter IX. Security and Freedom .....

The two kinds of security — In a free society undeserved fluctuations
of income are inevitable — Security of a certain economic status possible
only in a society organised on military lines — Economic security
guaranteed to some increases insecurity for the rest — The significance
of the increasing demand for security.

Chapter X. Why the Worst Get on Top ....

The moral effects of collectivism — The lowest common denominator
produces the largest homogeneous group — The particularist tendencies
inherent in socialism — The worship of power — The social ends justify
every means — Useful habits encouraged in the citizen of the totali-
tarian state — The selection of the leader.

Chapter XI. The End of Truth

The role of propaganda — People must be made to accept not only
the values but also the views about facts underlying the plan — The new
values made acceptable by introducing them under the names of the
old — No field of knowledge can be left uncontrolled — Truth and free-
dom of thought.

Chapter XII. The Socialist Roots of Nazism .

Socialist support completed the victory of the anti-liberal forces in
Germany — Sombart — Plenge — Lensch — Spengler and Moeller van den
Bruck — Socialism as the weapon against the liberal West.

Chapter XIII. The Totalitarians in our Midst

The spreading of German ideals — Historical realism more teutorrico
■ — The totalitarianism of the scientists — The monopolist organisations
of capital — The monopolist organisations of labour.

Chapter XIV. Material Conditions and Ideal Ends .

The economophobia of our generation — In a free society no single
purpose can be allowed permanently to dominate all others — not even
the abolition of unemployment — Realisation of most of our hopes
depends on rapid economic progress — The decline of English political
ideals.

Chapter XV. The Prospects of International Order

The conflict between national planning and international order —
Direction of economic activity on an international scale raises political
difficulties even greater than on a national scale — It would create con-
flicts of ideals which can be settled only by force — International
authority cannot be confined to economic matters — Need for a strong
but limited political power above the economic authorities — The merits
of the federal principle — The Rule of Law in the international sphere
— The danger of being over-ambitious.

Conclusion

Bibliographical Note ........

Index ......

PAGE

89

100

114

124

135

150

163

177

179

181

INTRODUCTION

Few discoveries are more irritating than those which expose
the pedigree of ideas.

Lord Acton.

CONTEMPORARY events differ from history in that we do
not know the results they will produce. Looking back, we
can assess the significance of past occurrences and trace the
consequences they have brought in their train. But while history
runs its course, it is not history to us. It leads us into an unknown
land and but rarely can we get a glimpse of what lies ahead. It
would be different if it were given to us to live a second time
through the same events with all the knowledge of what we have
seen before. How different would things appear to us, how
important and often alarming would changes seem that we now
scarcely notice ! It is probably fortunate that man can never
have this experience and knows of no laws which history must'
obey.

Yet, although history never quite repeats itself, and just because
no development is inevitable, we can in a measure learn from the
past to avoid a repetition of the same process. One need not
be a prophet to be aware of impending dangers. An accidental
combination of experience and interest will often reveal events
to one man under aspects which few yet see.

The following pages are the product of an experience as near
as possible to twice living through the same period — or at 1
least twice watching a very similar evolution of ideas. While
this is an experience one is not likely to gain in one country, it
may in certain circumstances be acquired by living in turn for
long periods in different countries. Though the influences to
which the trend of thought is subject in most civilised nations
are to a large extent similar, they do not necessarily operate at
the same time or at the same speed. Thus, by moving from one
country to another, one may sometimes twice watch similar
phases of intellectual development. The senses have then become
peculiarly acute. When one hears for a second time opinions
expressed or measures advocated which one has first met twenty
or twenty-five years ago, they assume a new meaning as symptoms
of a definite trend. They suggest, if not the necessity, at least
the probability, that developments will take a similar course.

It is necessary now to state the unpalatable truth that it is
Germany whose fate we are in some danger of repeating. The
danger is not immediate, it is true, and conditions in this country
are still so remote from those witnessed in recent years in Germany

i

2

THE ROAD TO SERFDOM

as to make it difficult to believe that we are moving in the same
direction. Yet, though the road be long, it is one on which it
becomes more difficult to turn back as one advances. If in the
long run we are the makers of our own fate, in the short run we
are the captives of the ideas we have created. Only if we
recognise the danger in time can we hope to avert it.

It is not to the Germany of Hitler, the Germany of the present
war, that this country bears yet any resemblance. But students
of the currents of ideas can hardly fail to see that there is more
than a superficial similarity between the trend of thought in
Germany during and after the last war and the present current
of ideas in this country. There exists now in this country certainly
the same determination that the organisation of the nation we
have achieved for purposes of defence shall be retained for the
purposes of creation. There is the same contempt for nineteenth-
century liberalism, the same spurious “ realism ” and even
cynicism, the same fatalistic acceptance of “ inevitable trends ”.
And at least nine out of every ten of the lessons which our most
vociferous reformers are so anxious we should learn from this
war are precisely the lessons which the Germans did learn from
the last war and which have done much to produce the Nazi
system. We shall have opportunity in the course of this book
to show that there are a large number of other points where, at
an interval of fifteen to twenty-five years, we seem to follow the
example of Germany. Although one does not like to be reminded,
it is not so many years since the socialist policy of that country
was generally held up by progressives as an example to be
imitated, just as in more recent years Sweden has been the model
country to which progressive eyes were directed. All those
whose memory goes further back know how deeply, for at least
a generation before the last war, German thought and German
practice influenced ideals and policy in this country.

The author has spent about half of his adult life in his native
Austria, in close touch with German intellectual life, and the
other half in the United States and England. In the dozen years
in which this country has now become his home he has become
increasingly convinced that at least some of the forces which
have destroyed freedom in Germany are also at work here, and
that the character and the source of this danger are, if possible,
even less understood than they were in Germany. The supreme
tragedy is still not seen that in Germany it was largely people of
goodwill, men who were admired and held up as models in this
country, who prepared the way, if they did not actually create, the
forces which now stand for everything they detest. Yet our chance
of averting a similar fate depends on our facing the^ danger and
on our being prepared to revise even our most cherished hopes

INTRODUCTION

3

and ambitions if they should prove to be the source of the danger.
There are few signs yet that we have the intellectual courage to-
admit to ourselves that we may have been wrong. Few are
ready to recognise that the rise of Fascism and Nazism was not
a reaction against the socialist trends of the preceding period, but
a necessary outcome of those tendencies. This is a truth which
most people were unwilling to see even when the similarities of
many of the repellent features of the internal regimes in communist
Russia and national-socialist Germany were widely recognised.
As a result, many who think themselves infinitely superior to the
aberrations of Nazism and sincerely hate all its manifestations,
work at the same time for ideals whose realisation would lead
straight to the abhorred tyranny.

All parallels between developments in different countries are, of
course, deceptive ; but I am not basing my argument mainly on
such parallels. Nor am I arguing that these developments are
inevitable. If they were, there would be no point in writing this.
They can be prevented if people realise in time where their efforts
may lead. But till recently there was little hope that any attempt
to make them see the danger would be successful. It seems,
however, as if the time were now ripe for a fuller discussion of
the whole issue. Not only is the problem now more widely
recognised, there are also special reasons which at this juncture
make it imperative that we should face the issues squarely.

It will, perhaps, be said that this is not the time to raise an
issue on which opinions clash sharply. But the socialism of
which we speak is not a party matter, and the questions which
we are discussing have little to do with the questions at dispute
between political parties. It does not affect our problem
that some groups may want less socialism than others, that some
want socialism mainly in the interest of one group and others in
that of another. The important point is that, if we take the people
whose views influence developments, they are now in this country
in some measure all socialists. If it is no longer fashionable to
emphasise that “ we are all socialists now ”, this is so merely
because the fact is too obvious. Scarcely anybody doubts that
we must continue to move towards socialism, and most people
are merely trying to deflect this movement in the interest of
a particular class or group.

It is because nearly everybody wants it that we are moving in
this direction. There are no objective facts which make it
inevitable. We shall have to say something about the alleged
inevitability of “ planning ” later. The main question is where
this movement will lead us. Is it not possible that if the people
whose convictions now give it an irresistible momentum began
to see what only a few yet apprehend, they would recoil in horror

THE ROAD TO SERFDOM

4

and abandon the quest which for half a century has engaged so
‘many people of goodwill ? Where these common beliefs of our
generation will lead us is a problem not for one party but for
every one of us, a problem of the most momentous significance.
Is there a greater tragedy imaginable than that in our endeavour
consciously to shape our future in accordance with high ideals,
we should in fact unwittingly produce the very opposite of what
we have been striving for ?

There is an even more pressing reason why at this time we
should seriously endeavour to understand the forces which have
created National Socialism : that this will enable us to understand
our enemy and the issue at stake between us. It cannot be denied
that there is yet little recognition of the positive ideals for which
we are fighting. We know that we are fighting for freedom to
shape our life according to our own ideas. That is a great deal,
but not enough. It is not enough to give us the firm beliefs
which we need to resist an enemy who uses propaganda as one
of his main weapons not only in the most blatant but also in the
most subtle forms. It is still more insufficient when we have to
counter this propaganda among the people in the countries under
his control and elsewhere, where the effect of this propaganda
will not disappear with the defeat of the Axis powers. It is not
enough if we are to show to others that what we are fighting
for is worth their support, and not enough to guide us in the
building of a new Europe safe against the dangers to which the
old one has succumbed.

It is a lamentable fact that the English in their dealings with
the dictators before the war, not less than in their attempts at
propaganda and in the discussion of their war aims, have shown
an inner insecurity and uncertainty of aim which can be explained
only by confusion about their own ideals and the nature of the
differences which separated them from the enemy. We have
been misled as much because we have refused to believe that the
enemy was sincere in the profession of some beliefs which we
shared as because we believed in the sincerity of some of his
other claims. Have not the parties of the Left as well as those
of the Right been deceived by believing that the National-
Socialist Party was in the service of the capitalists and opposed
to all forms of socialism ? How many features of Hitler’s system
have not been recommended to us for imitation from the most
unexpected quarters, unaware that they are an integral part of
that system and incompatible with the free society we hope to
preserve ? The number of dangerous mistakes we have made
before and since the outbreak of war because we do not under-
stand the opponent with whom we are faced is appalling. It
seems almost as if we did not want to understand the develop-

INTRODUCTION

5

ment which has produced totalitarianism because such an under- .
standing might destroy some of the dearest illusions to which we
are determined to cling.

We shall never be successful in our dealings with the Germans
till we understand the character and the growth of the ideas
which now govern them. The theory which is once again put
forth, that the Germans as such are inherently vicious, is hardly
tenable and not very creditable to those who hold it. It dis-
honours the long series of Englishmen who during the past
hundred years have gladly taken over what was best, and not only
what was best, in German thought. It overlooks the fact that
when eighty years ago John Stuart Mill was writing his great
essay On Liberty he drew his inspiration, more than from any other
men, from two Germans, Goethe and Wilhelm von Humboldt , 1
and forgets the fact that two of the most influential intellectual
forebears of National Socialism, Thomas Carlyle and Houston
Stewart Chamberlain, were a Scot and an Englishman. In its
cruder forms this view is a disgrace to those who by maintaining
it adopt the worst features of German racial theories. The
problem is not why the Germans as such are vicious, which
congenitally they are probably no more than other peoples, but
to determine the circumstances which during the last seventy
years have made possible the progressive growth and the ultimate
victory of a particular set of ideas, and why in the end this victory
has brought the most vicious elements among them to the top.
Mere hatred of everything German, instead of the particular ideas
which now dominate the Germans is, moreover, very dangerous,
because it blinds those who indulge in it against a real threat.
It is to be feared that this attitude is frequently merely a kind of
escapism, caused by an unwillingness to recognise tendencies
which are not confined to Germany, and by reluctance to re-
examine, and if necessary to discard, beliefs which we have taken
over from the Germans and by which we are still as much deluded
as the Germans were. It is doubly dangerous because the con-
tention that only the peculiar wickedness of the Germans has
produced the Nazi system is likely to become the excuse for
forcing on us the very institutions which have produced that
wickedness.

The interpretation of the developments in Germany and Italy
about to be proffered in this book is very different from that given
by most foreign observers and by the majority of exiles from
those countries. But if this interpretation is correct, it will also

1 As some people may think this statement exaggerated, the testimony of
Lord Motley ,may be worth quoting, who in his Recollections speaks of the
“ acknowledged point ” that the main argument of the essay On Liberty “ was
not original but came from Germany ”.

6 the road to serfdom

t explain. why it is almost impossible for a person who, like most
of the exiles and the foreign correspondents of English and
American newspapers, holds the now prevalent socialist views, to
see those events in the proper perspective . 1 The superficial and
misleading view, which sees in National-Socialism merely a
reaction fomented by those whose privileges or interests were
threatened by the advance of socialism, was naturally supported
by all those who, although they were at one time active in the
movement of ideas that has led to National-Socialism, have
stopped at some point of that development and, by the conflict
into which this brought them with the Nazis, were forced to leave
their country. But the fact that they were numerically the only
significant opposition to the Nazis means no more than that in
the wider sense practically all Germans had become socialists,
and that liberalism in the old sense had been driven out by
socialism. As we hope to show, the conflict in existence
between the National-Socialist “ Right ” and the “ Left ” in
Germany is the kind of conflict that will always arise between
rival socialist factions. If this interpretation is correct it means,
however, that many of those socialist refugees, in clinging to
their beliefs, are now, though with the best will in the world,
helping to lead their adopted country the way which Germany
has gone.

I know that many of my English friends have sometimes been
shocked by the semi-Fascist views they would occasionally hear
expressed by German refugees, whose genuinely socialist con-
victions could not be doubted. But while these English observers
put this down to their being Germans, the true explanation is
that they were socialists whose experience had carried them
several stages beyond that yet reached by socialists in this country.
It is true, of course, that German socialists have found much
support in their country from certain features of the Prussian
tradition ; and this kinship between Prussianism and socialism,
in which in Germany both sides gloried, gives additional support
to our main contention . 2 But it would be a mistake to believe

1 How thoroughly the views held in all quarters, even the most conservative,
of a whole country can be coloured by the predominant Left bias of the foreign
correspondents of its Press, is well illustrated by the views almost universally
held in America about the relations between Great Britain and India. The
Englishman who wishes to see events on the European Continent in the proper
perspective must seriously consider the possibility that his views may have
been distorted in precisely the same manner, and for the same reasons. This
is in no way meant to reflect on the sincerity of the views of American and
English foreign correspondents. But anyone who knows the kind of native
circles with which foreign correspondents are likely to have close contacts,
will have no difficulty in understanding the sources of this bias.

a That there did exist a certain kinship between socialism and fl^c organisation
of the Prussian State, consciously organised from the top as in no other country,
is undeniable and was freely recognised already by the early French socialists.

INTRODUCTION

7

that the specific German rather than the socialist element pro-
duced totalitarianism. It was the prevalence of socialist views
and not Prussianism that Germany had in common with Italy
and Russia — and it was from the masses and not from the
classes steeped in the Prussian tradition, and favoured by it,
that National- Socialism arose.

Long before the ideal of running the whole state on the same principles as a
single factory was to inspire nineteenth-century socialism, the Prussian poet
Novalis had already deplored that “ no other state has ever been administered
so much like a factory as Prussia since the death of Frederick William.”
(Cf. Novalis [Friedrich von Hardenberg], Glauben und Liebe, oder der Konig
und die Konigin, 1798.)

CHAPTER I

THE ABANDONED ROAD

A programme whose basic thesis is, not that the system of
free enterprise for profit has failed in this generation, but that
it has not yet been tried.

F. D. Roosevelt.

WHEN the course of civilisation takes an unexpected turn,
when instead of the continuous progress which we have come to
expect, we find ourselves threatened by evils associated by us
with past ages of barbarism, we blame naturally anything but
ourselves. Have we not all striven according to our best lights,
and have not many of our finest minds incessantly worked to
make this a better world ? Have not all our efforts and hopes
been directed towards greater freedom, justice, and prosperity ?
If the outcome is so different from our aims, if, instead of freedom
and prosperity, bondage and misery stare us in the face, is it not
clear that sinister forces must have foiled our intentions, that we
are the victims of some evil power which must be conquered
before we can resume the road to better things ? However much
we may differ when we name the culprit, whether it is the wicked
capitalist or the vicious spirit of a particular nation, the stupidity
of our elders, or a social system not yet, although we have struggled
against it for half a century, fully overthrown— -we all are, or
at least were until recently, certain of one thing : that the
leading ideas which during the last generation have become
common to most people of goodwill and have determined the
major changes in our social life cannot have been wrong. We
are ready to accept almost any explanation of the present crisis
of our civilisation except one : that the present state of the
world may be the result of genuine error on our own part, and
that the pursuit of some of our most cherished ideals have
apparently produced results utterly different from those which
we expected.

. While all our energies are directed to bring ing this war to a
victorious conclusion, it is sometimes difficult to remember that
even, before the war the values for which we are now fighting
were threatened here and destroyed elsewhere. Though for the
time being the different ideals are represented by hostile nations
fighting for their existence, we must not forget that this conflict
has grown out of a struggle of ideas within what, not so long ago,
was a common European civilisation ; and that the tendencies
which have culminated in the creation of the totalitarian systems

THE ABANDONED ROAD

9

were not confined to the countries which have succumbed to
them. Though the first task must now be to win the war, to
win it will only gain us another opportunity to face the basic
problems and to find a way of averting the fate which has
overtaken kindred civilisations.

Now, it is somewhat difficult to think of Germany and Italy, or
of Russia, not as different worlds, but as products of a development
of thought in which we have shared ; it is, at least so far as our
enemies are concerned, easier and more comforting to think that
they are entirely different from us and that what happened there
cannot happen here. Yet the history of these countries in the
years before the rise of the totalitarian system showed few features
with which we are not familiar. The external conflict is a result
of a transformation of European thought in which others have
moved so much faster as to bring them into irreconcilable conflict
with our ideals, but which has not left us unaffected.

That a change of ideas, and the force of human will, have
made the world what it is now, though men did not foresee the
results, and that no spontaneous change in the facts obliged us
thus to adapt our thought, is perhaps particularly difficult
for the English to see, just because in this development the
English have, fortunately for them, lagged behind most of
the European peoples. We still think of the ideals which guide
us and have guided us for the past generation, as ideals only to
be realised in the future, and are not aware how far in the last
twenty-five years they have already transformed, not only the
world, but also this country. We still believe that until quite
recently we were governed by what are vaguely called nineteenth-
century ideas or the principle of laissez-faire. Compared with
some other countries, and from the point of view of those impatient
to speed up the change, there may be some justification for
such belief. But although till 1931 this country had followed
only slowly on the path on which others had led, even by then we
had moved so far that only those whose memory goes back to the
years before the last war know what a liberal world has been
like. 1

The crucial point of which people here are still so little aware
is, however, not merely the magnitude of the changes which have
taken place during the last generation, but the fact that they mean

1 Even in that year the Macmillan Report could speak already of “ the change
of outlook of the government of this country in recent times, its growing pre-
occupation, irrespective of party, with the management of the life of the people ”
and add that “ Parliament finds itself increasingly engaged in legislation which
has for its conscious aim the regulation of the day-to-day affairs of the com-
munity and now intervenes in matters formerly thought to be entirely outside
its scope ”. This could be said before, later in the same year, the country
finally took Ihe headlong plunge and, in the short space of the inglorious years
1931 to 1939, transformed its economic system beyond recognition.

io THE ROAD TO SERFDOM

a complete change in the direction of the evolution of our ideas
and social order. For at least twenty-five years before the spectre
of totalitarianism became a real threat, we had progressively been
moving away from the basic ideas on which European civilisation
has been built. That this movement on which we have entered
with such high hopes and ambitions should have brought us face
to face with the totalitarian horror has come as a profound shock
to this generation, which still refuses to connect the two facts. Yet
this development merely confirms the warnings of the fathers of
the liberal philosophy which we still profess. We have pro-
gressively abandoned that freedom in economic affairs without
which personal and political freedom has never existed in the
past. Although we had been warned by some of the greatest
political thinkers of the nineteenth century, by de Tocqueville
and Lord Acton, that socialism means slavery, we have steadily
moved in the direction of socialism. And now that we have seen
a new form of slavery arise before our eyes, we have so completely
forgotten the warning, that it scarcely occurs to us that the two
things may be connected. 1

How sharp a break not only with the recent past but with the
whole evolution of Western civilisation the modern trend towards
socialism means, becomes clear if we consider it not merely
against the background of the nineteenth century, but in a
longer historical perspective. We are rapidly abandoning not
the views merely of Cobden and Bright, of Adam Smith and
Hume, or even of Locke and Milton, but one of the salient
characteristics of Western civilisation as it has grown from the
foundations laid by Christianity and the Greeks and Romans.
Not merely nineteenth- and eighteenth-century liberalism, but
the basic individualism inherited by us from Erasmus and
Montaigne, from Cicero and Tacitus, Pericles and Thucydides
is progressively relinquished.

The Nazi leader who described the National-Socialist revolution
as a counter-Renaissance spoke more truly than he probably
knew. It was the decisive step in the destruction of that civilisa-
tion which modern man had built up from the age of the
Renaissance and which was above all an individualist civilisation.
Individualism has a bad name to-day and the term has come to
be connected with egotism and selfishness. But the individualism
of which we speak in contrast to socialism and all other forms

1 Even much more recent warnings which have proved dreadfully true have
been almost entirely forgotten. It is not yet thirty years since Mr. Hilaire
Belloc, in a book which explains more of what has happened since in Germany
than most works written after the event, explained that “ the effect of Socialist
doctrine on Capitalist society is to produce a third thing different from either
of its two begetters — to wit, the Servile State ” (The Servile State, foi3, 3rd ed.
1927, P- xiv).

THE ABANDONED ROAD

II

of collectivism has no necessary connection with these. Only
gradually in the course of this book shall we be able to make clear
the contrast between the two opposing principles. But the
essential features of that individualism which, from elements
provided by Christianity and the philosophy of classical antiquity,
was first fully developed during the Renaissance and has since
grown and spread into w'hat we know as Western European
civilisation — the respect for the individual man qua man, that is
the recognition of his own views and tastes as supreme in his
own sphere, however narrowly that may be circumscribed, and
the belief that it is desirable that men should develop their own
individual gifts and bents. “ Freedom ” and “ liberty ” are now
words so worn with use and abuse that one must hesitate to
employ them to express the ideals for which they stood during
that period. Tolerance is, perhaps, the only word which still
preserves the full meaning of the principle which during the
whole of this period was in the ascendant and which only in
recent times has again been in decline, to disappear completely
with the rise of the totalitarian state.

The gradual transformation of a rigidly organised hierarchic
system into one where men could at least attempt to shape their
own life, where man gained the opportunity of knowing and
choosing between different forms of life, is closely associated with
the growth of commerce. From the commercial cities of Northern
Italy the new view of life spread with commerce to the west and
north, through France and the south-w r est of Germany to the Low
Countries and the British Isles, taking firm root wherever there
was no despotic political power to stifle it. In the Low Countries
and Britain it for a long time enjoyed its fullest development
and for the first time had an opportunity to grow freely and to
become the foundation of the social and political life of these
countries. And it was from there that in the late seventeenth
and eighteenth centuries it again began to spread in a more
fully developed form to the West and East, to the New World
and the centre of the European continent where devastating
wars and political oppression had largely submerged the earlier
beginnings of a similar growth . 1

During the whole of this modem period of European history
the general direction of social development was one of freeing
the individual from the ties which had bound him to the customary
or prescribed ways in the pursuit of his ordinary activities. The
conscious realisation that the spontaneous and uncontrolled efforts
of individuals were capable of producing a complex order of

1 The most fateful of these developments, pregnant with consequences not
yet extinct, was the subjection and partial destruction of the German bour-
geoisie by the territorial princes in the fifteenth and sixteenth centuries.

12

THE ROAD TO SERFDOM

economic activities could come only after this development had
made some progress. The subsequent elaboration of a consistent
argument in favour of economic freedom was the outcome of a
free growth of economic activity which had been the undesigned
and unforeseen by-product of political freedom.

Perhaps the greatest result of the unchaining of individual
energies was the marvellous growth of science which followed the
march of individual liberty from Italy to England and beyond.
That the inventive faculty of man had been no less in earlier
periods is shown by the many highly ingenious automatic toys
and other mechanical contrivances constructed while industrial
technique still remained stationary, and by the development in
some industries which, like mining or watch-making, were not
subject to restrictive controls. But the few attempts towards a
more extended industrial use of mechanical inventions, some
extraordinarily advanced, were promptly suppressed, and the
desire for knowledge was stifled, so long as the dominant views
were held to be binding for all : the beliefs of the great majority
on what was right and proper were allowed to bar the way of
the individual innovator. Only since industrial freedom opened
the path to the free use of new knowledge, only since everything
could be tried — if somebody could be found to back it at his own
risk — and, it should be added, as often as not from outside the
authorities officially entrusted with the cultivation of learning,
has science made the great strides which in the last hundred and
fifty years have changed the face of the world.

As is so often true, the nature of our civilisation has been
seen more clearly by its enemies than by most of its friends :
“ the perennial Western malady, the revolt of the individual
against the species ”, as that nineteenth-century totalitarian,
Auguste Comte, has described it, was indeed the force which
built our civilisation. What the nineteenth century added to the
individualism of the preceding period was merely to make all
classes conscious of freedom, to develop systematically and
continuously what had grown in a haphazard and patchy manner
and to spread it from England and Holland over most of the
European Continent.

The result of this growth surpassed all expectations. Wherever
the barriers to the free exercise of human ingenuity were removed
man became rapidly able to satisfy ever-widening ranges of desire.
And while the rising standard soon led to the discovery of very
dark spots in society, spots which men were no longer willing to
tolerate, there was probably no class that did not substantially
benefit from the general advance. We cannot do justice to this
astonishing growth if we measure it by our present ..standards,
which themselves result from this growth and now mak e many

THE ABANDONED ROAD 1 3

defects obvious. To appreciate what it meant to those who
took part in it we must measure it by the hopes and wishes
men held when it began : and there can be no doubt that its
success surpassed man’s wildest dreams, that by the beginning
of the twentieth century the working man in the Western world
had reached a degree of material comfort, security, and personal
independence which a hundred years before had seemed scarcely
possible.

What in the future will probably appear the most significant
and far-reaching effect of this success is the new sense of power
over their own fate, the belief in the unbounded possibilities of
improving their own lot, which the success already achieved
created among men. With the success grew ambition — and man
had every right to be ambitious. What had been an inspiring
promise seemed no longer enough, the rate of progress far too
slow ; and the principles which had made this progress possible
in the past came to be regarded more as obstacles to speedier
progress, impatiently to be brushed away, than as the conditions
for the preservation and development of what had already been
achieved.

# # # # *

There is nothing in the basic principles of liberalism to make
it a stationary' creed, there are no hard-and-fast rules fixed once
and for all. The fundamental principle that in the ordering of
our affairs we should make as much use as possible of the spon-
taneous forces of society, and resort as little as possible to coercion,
is capable of an infinite variety of applications. There is, in
particular, all the difference between deliberately creating a
system within which competition will work as beneficially as
possible, and passively accepting institutions as they are. Probably
nothing has done so much harm to the liberal cause as the wooden
insistence of some liberals on certain rough rules of thumb, above
all the principle of laissez-faire. Yet in a sense this was necessary
and unavoidable. Against the innumerable interests who could
show that particular measures would confer immediate and obvious
benefits on some, while the harm they caused was much more
indirect and difficult to see, nothing short of some hard-and-fast
rule would have been effective. And since a strong presumption
in favour of industrial liberty had undoubtedly been established,
the temptation to present it as a rule which knew no exceptions
was too strong always to be resisted.

But with this attitude taken by many popularisers of the liberal
doctrine, it was almost inevitable that, once their position was
penetrated at some points, it should soon collapse as a whole.
The position was further weakened by the inevitably slow progress

14 THE ROAD TO SERFDOM

of a policy which aimed at a gradual improvement of the institu-
tional framework of a free society. This progress depended on
the growth of our understanding of the social forces and the
conditions most favourable to their working in 5 desirable manner.
Since the task was to assist, and where necessary to supplement,
their operation, the first requisite was to understand them.
The attitude of the liberal towards society is like that of the
gardener who tends a plant and in order to create the conditions
most favourable to its growth must know as much as possible
about its structure and the way it functions.

No sensible person should have doubted that the crude rules in
which the principles of economic policy of the nineteenth century
were expressed were only a beginning, that we had yet much to
learn, and that there were still immense possibilities of advance-
ment on the lines on which we had moved. But this advance
could only come as we gained increasing intellectual mastery of
the forces of which we had to make use. There were many
obvious tasks, such as our handling of the monetary system, and
the prevention or control of monopoly, and an even greater number
of less obvious but hardly less important tasks to be undertaken
in other fields, where there could be no doubt that the govern-
ments possessed enormous powers for good and evil ; and there
was every reason to expect that with a better understanding of
the problems we should some day be able to use these powers
successfully.

But while the progress towards what is commonly called
“ positive ” action was necessarily slow, and while for the
immediate improvement liberalism had to rely largely on the
gradual increase of wealth which freedom brought about, it had
constantly to fight proposals which threatened this progress. It
* came to be regarded as a “ negative ” creed because it could
offer to particular individuals little more than a share in the
common progress — a progress which came to be taken more and
more for granted and was no longer recognised as the result of
the policy of freedom. It might even be said that the very
success of liberalism became the cause of its decline. Because
of the success already achieved man became increasingly un-
willing to tolerate the evils still with him which now appeared
both unbearable and unnecessary.

* ■ # # # #

Because of the growing impatience with the slow advance of
liberal policy, the just irritation with those who used liberal
phraseology in defence of anti-social privileges, and the boundless
ambition seemingly justified by the material improvements
already achieved, it came to pass that toward the turn of the

THE ABANDONED ROAD 1 5

century the belief in the basic tenets of liberalism was more
and more relinquished. What had been achieved came to be
regarded as a secure and imperishable possession, acquired once
and for all. The eyes of the people became fixed on the new
demands, the rapid satisfaction of which seemed to be barred
by the adherence to the old principles. . It became more and
more widely accepted that further advance could not be expected
along the old lines within the general framework which had
made past progress possible, but only by a complete remodelling
of society. It was no longer a question of adding to or improving
the existing machinery, but of completely scrapping and replacing
it. And as the hope of the new generation came to be centred
on something completely new, interest in, and understanding,
of, the functioning of the existing society rapidly declined ;
and with the decline of the understanding of the way in which
the free system worked our awareness of what depended on its
existence also decreased.

This is not the place to discuss how this change in outlook was
fostered by the uncritical transfer to the problems of society of
habits of thought engendered by the preoccupation with techno-
logical problems, the habits of thought of the natural scientist
and the engineer, how these at the same time tended to discredit
the results of the past study of society which did not conform to
their prejudices, and to impose ideals of organisation on a sphere
to which they are not appropriate . 1 All we are here concerned
to show is how completely, though gradually and by almost
imperceptible steps, our attitude towards society has changed.
What at every stage of this process of change had appeared a
difference of degree only, has in its cumulative effect already
brought about a fundamental difference between the older liberal
attitude towards society and the present approach to social
problems. The change amounts to a complete reversal of the
trend we have sketched, an entire abandonment of the individualist
tradition which has created Western civilisation.

According to the views now dominant the question is no longer
how we can make the best use of the spontaneous forces found
in a free society. _ We have in effect undertaken to dispense
with the forces which produced unforeseen results and to replace
the impersonal and anonymous mechanism of the market by
collective and “ conscious ” direction of all social forces to
deliberately chosen goals. The difference cannot be better
illustrated than by the extreme position taken in a widely acclaimed

1 The author has made an attempt to trace the beginning of this develop-
ment in two series of articles on “ Scientism and the Study of Society ” and
“ The Couifter-Revolution of Science " which appeared in Economica,
I94I-4-

1 6 THE ROAD TO SERFDOM

book on whose programme of so-called “ planning for freedom ”
we shall have to comment yet more than once.

We have never had to set up and direct [writes Dr. Karl Mannheim]
the entire system of nature as we are forced to do to-day with society.
. . . Mankind is tending more and more to regulate the whole of
its social life, although it has never attempted to create a second
nature. 1

* # * # #

It is significant that this change in the trend of ideas has
coincided with a reversal of the direction in which ideas have
travelled in space. For over two hundred years English ideas
had been spreading eastwards. The rule of freedom which had
been achieved in England seemed destined to spread throughout
the world. By about 1870 the reign of these ideas had probably
reached its easternmost expansion. From then onwards it began
to retreat and a different set of ideas, not really new but very old,
began to advance from the East. England lost her intellectual
leadership in the political and social sphere and became an
importer of ideas. For the next sixty years Germany became
the centre from which the ideas destined to govern the world
in the twentieth century spread east and west. Whether it was
Hegel or Marx, List or Schmoller, Sombart or Mannheim,
whether it was socialism in its more radical form or merely
“ organisation ” or “ planning ” of a less radical kind, German
ideas were everywhere readily imported and German institutions
imitated. Although most of the new ideas, and particularly
socialism, did not originate in Germany, it was in Germany that
they were perfected and during the last quarter of the nineteenth
and the first quarter of the twentieth century they reached their
fullest development. It is now often forgotten how very con-
siderable was the lead which Germany had during this period
in the development of the theory and practice of socialism,
that a generation before socialism became a serious issue in this
country, Germany had a large socialist party in her parliament,
and that till not very long ago the doctrinal development of
socialism was almost entirely carried on in Germany and Austria,
so that even to-day Russian discussion largely carries on where
the Germans left off ; most English socialists are still unaware
that the majority of the problems they begin to discover were
thoroughly discussed by German socialists long ago.

The intellectual influence which German thinkers were able
to exercise during this period on the whole world was supported
not merely by the great material progress of Germany but even
more by the extraordinary reputation which German thinkers and
1 Man and Society in an Age of Reconstruction , 1940, p. 175.

THE ABANDONED ROAD

17

scientists had earned during the preceding hundred years when
Germany had once more become an integral and even leading
member of the common European civilisation. But it soon served
to assist the spreading from Germany of ideas directed against
the foundations of that civilisation. The Germans themselves —
or at least those among them who spread these ideas — were fully
aware of the conflict : what had been the common heritage of
European civilisation became to them, long before the Nazis,
“ Western ” civilisation — where “ Western ” was no longer used
in the old sense of Occident but had come to mean west of the
Rhine. “ Western ” in this sense was Liberalism and Democracy,
Capitalism and Individualism, Free Trade and any form of Inter-
nationalism or love of peace.

But in spite of the ill-concealed contempt of an ever-increasing
number of Germans for those “ shallow ” Western ideals, or
perhaps because of it, the people of the West continued to import
German ideas and were even induced to believe that their own
former convictions had merely been rationalisations of selfish
interests, that Free Trade was a doctrine invented to further
British interests, and that the political ideals England had given
to the world were hopelessly outmoded and a thing to be ashamed
of.

CHAPTER II

THE GREAT UTOPIA

What has always made the state a hell on earth has been
precisely that man has tried to make it his heaven.

F. Hoelderlin.

THAT socialism has displaced liberalism as the doctrine held
by the great majority of progressives does not simply mean that
people had forgotten the warnings of the great liberal thinkers of
the past about the consequences of collectivism. It has happened
because they were persuaded of the very opposite of what these
men had predicted. The extraordinary thing is that the same
socialism that was not only early recognised as the gravest
threat to freedom, but quite openly began as a reaction against
the liberalism of the French Revolution, gained general accept-
ance under the flag of liberty. It is rarely remembered now
that socialism in its beginnings was frankly authoritarian.
The French writers who laid the foundations of modern
socialism had no doubt that their ideas could be put into
practice only by a strong dictatorial government. To them
socialism meant an attempt to “ terminate the revolution ”
by a deliberate reorganisation of society on hierarchical lines,
and the imposition of a coercive “ spiritual power ”. Where
freedom was concerned, the founders of socialism made no bones
about their intentions. Freedom of thought they regarded as the
root-evil of nineteenth-century society, and the first of modern
planners, Saint-Simon, even predicted that those who did not
obey his proposed planning boards would be “ treated as cattle ”.

Only under the influence of the strong democratic currents
preceding the revolution of 1848 did socialism begin to ally
itself with the forces of freedom. But it took the new “ democratic
socialism ” a long time to live down the suspicions aroused by
its antecedents. Nobody saw more clearly than de Tocqueville
that democracy as an essentially individualist institution stood
in an irreconcilable conflict with socialism :

Democracy extends the sphere of individual freedom [he said in
1848], socialism restricts it. Democracy attaches all possible value
to each man ; socialism makes each man a mere agent, a mere num-
ber. Democracy and socialism h ave nothing in common but one
word . equality. But notice the difference : while democracy seeks
equality in liberty, socialism seeks equality in restraint and servitude. 1

l “ Discours prononce is l’assembiee constituante le 12 Septembre 1848 sur
la question du droit au travail.” CEuvres computes d’ Alexis ’de Tocqueville
VOl. 1A, I ODD, p. 546. ’

18

THE GREAT UTOPIA

19

To allay these suspicions and to harness to its cart the strongest
of all political motives, the craving for freedom, socialism began
increasingly to make use of the promise of a “ new freedom
The coming of socialism was to be the leap from the realm of
necessity to the realm of freedom. It was to bring “ economic
freedom ”, without which the political freedom already gained
was “ not worth having ”. Only socialism was capable of
effecting the consummation of the agelong struggle for free-
dom in which the attainment of political freedom was but a
first step.

The subtle change in meaning to which the word freedom
was subjected in order that this argument should sound plausible
is important. To the great apostles of political freedom the
word had meant freedom from coercion, freedom from the
arbitrary power of other men, release from the ties which left
the individual no choice but obedience to the orders of a superior
to whom he was attached. The new freedom promised, however,
was to be freedom from necessity, release from the compulsion
of the circumstances which inevitably limit the range of choice
of all of us, although for some very much more than for others.
Before man could be truly free, the “ despotism of physical
want ” had to be broken, the “ restraints of the economic
system ” relaxed.

Freedom in this sense is, of course, merely another name for
power 1 or wealth. Yet, although the promises of this new
freedom were often coupled with irresponsible promises of a great
increase in material wealth in a socialist society, it was not from
such an absolute conquest of the niggardliness of nature that
economic freedom was expected. What the promise really
amounted to was that the great existing disparities in the range of
choice of different people were to disappear. The demand for
the new freedom was thus only another name for the old demand
for an equal distribution of wealth. But the new name gave
the socialists another word in common with the liberals and
they exploited it to the full. And although the word was used
in a different sense by the two groups, few people noticed this
and still fewer asked themselves whether the two kinds of
freedom promised really could be combined.

1 The characteristic confusion of freedom with power, which we shall meet
again and again throughout this discussion, is too big a subject to be thoroughly
examined here. As old as socialism itself, it is so closely allied with it that
almost seventy years ago a French scholar, discussing its Saint-Simonian
origins, was led to say that this theory of liberty “ est a elle seule tout le
socialisme ” (P. Janet, Saint-Simon et le Saint- Simonisme, 1878, p. 26, note).
The most explicit defender of this confusion is, significantly, the leading
philosopher of American left-wingism, John Dewey, according to whom
“ liberty is the’ effective power to do specific things ” so that “ the demand
for liberty is demand for power ” (“ Liberty and Social Control ”, The Social
Frontier November 1935, p. 41).

20

THE ROAD TO SERFDOM

There can be no doubt that the promise of greater freedom
has become one of the most effective weapons of socialist propa-
ganda and that the belief that socialism would bring freedom
is genuine and sincere. But this would only heighten the tragedy
if it should prove that what was promised to us as the Road to
Freedom was in fact the High Road to Servitude. Unquestion-
ably the promise of more freedom was responsible for luring
more and more liberals along the socialist road, for blinding
them to the conflict which exists between the basic principles of
socialism and liberalism, and for often enabling socialists to
usurp the very name of the old party of freedom. Socialism
was embraced by the greater part of the intelligentsia as the
apparent heir of the liberal tradition : therefore it is not sur-
prising that to them the idea should appear inconceivable of
socialism leading to the opposite of liberty.

# # # # #

In recent years, however, the old apprehensions' of the unfore-
seen consequences of socialism have once more been strongly
voiced from the most unexpected quarters. Observer after
observer, in spite of the contrary expectation with which he
approached his subject, has been impressed with the extra-
ordinary similarity in many respects of the conditions under
“ fascism ” and “ communism While “ progressives ” in this
country and elsewhere were still deluding themselves that com-
munism and fascism represented opposite poles, more and more
people began to ask themselves whether these new tyrannies
were not the outcome of the same tendencies. Even communists
must have been somewhat shaken by such testimonies as that of
Mr. Max Eastman, Lenin’s old friend, who found himself
compelled to admit that “ instead of being better, Stalinism is
worse than fascism, more ruthless, barbarous, unjust, immoral,
anti-democratic, unredeemed by any hope or scruple ”, and that
it is “ better described as superfascist ” ; and when we find
the same author recognising that “ Stalinism is socialism, in
the sense of being an inevitable although unforeseen political
accompaniment of the nationalisation' and collectivisation which
he had relied upon as part of his plan for erecting a class-
less society ’V his conclusion clearly achieves wider significance.

Mr. Eastman’s case is perhaps the most remarkable, yet he is
by no means the first or the only sympathetic observer of the
Russian experiment to form similar conclusions. Several
years earlier Mr. W. H. Chamberlin, who in twelve years in
Russia as an American correspondent had seen all his ideals
shattered, summed up the conclusions of his studies there and

1 Max Eastman, Stalin's Russia and the Crisis of Socialism , 1940, p. 82.

THE GREAT UTOPIA

21

in Germany and Italy in the statement that “ Socialism is certain
to prove, in the beginning at least, the road NOT to freedom,
but to dictatorship and counter-dictatorships, to civil war of the
fiercest kind. Socialism achieved and maintained by democratic
means seems definitely to belong to the world of utopias.” 1
Similarly a British writer, Mr. F. A. Voigt, after many years of
close observation of developments in Europe as a foreign corre-
spondent, concludes that “ Marxism has led to Fascisfii and
National-Socialism, because, in all essentials, it is Fascism and
National Socialism ” 2 And Dr. Walter Lippmann has arrived
at the conviction that

the generation to which we belong is now learning from experience
what happens when men retreat from freedom to a coercive organ-
isation of their affairs. Though they promise themselves a more
abundant life, they must in practice renounce it ; as the organised
direction increases, the variety of ends must give way to uniformity.
That is the nemesis of the planned society and the authoritarian
principle in human affairs . 3

Many more similar statements from people in a position to
judge might be selected from publications of recent years, particu-
larly from those by men who as citizens of the now totalitarian
countries have lived through the transformation and have been
forced by their experience to revise many cherished beliefs. We
shall quote as one more example a German writer who ex-
presses the same conclusion perhaps more justly than those already
quoted.

The complete collapse of the belief in the attainability of freedom
and equality through Marxism [writes Mr. Peter Drucker 4 ] has
forced Russia to travel the same road towards a totalitarian,
purely negative, non-economic society of unfreedom and inequality
which Germany has been following. Not that communism and
fascism are essentially the same. Fascism is the stage reached after
communism has proved an illusion, and it has proved as much an
illusion in Stalinist Russia as in pre-Hitler Germany.

No less significant is the intellectual history of many of the
Nazi and Fascist leaders. Everybody who has watched the
growth of these movements in Italy 5 or Germany has been
struck by the number of leading men, from Mussolini downwards
(and not excluding Laval and Quisling), who began as socialists

1 W. H. Chamberlin, A False Utopia, 1937, p. 202-3.

2 F. A. Voigt, Unto Ccesar, 1939, p. 95.

8 Atlantic Monthly, November 1936, p. 552.

4 The End of Economic Man, 1939, p. 230.

6 An illuminating account of the intellectual history of many of the Fascist
leaders will be found in R. Michels (himself an ex-Marxist Fascist), Sozialismus
und Faszismus, Munich 1923, vol. II, pp. 264-6, and 311-12.

22 THE ROAD TO SERFDOM

and ended as Fascists or Nazis. And what is true of the leaders
is even more true of the rank and file of the movement. The
relative ease with which a young communist could be converted
into a Nazi or vice versa was generally known in Germany, best
of all to the propagandists of the two parties. Many a University
teacher in this country during the 1930’s has seen English and
American students return from the Continent, uncertain whether
they \frere communists or Nazis and certain only that they hated
Western liberal civilisation.

It is true, of course, that in Germany before 1933 and in Italy
before 1922 communists and Nazis or Fascists clashed more
frequently with each other than with other parties. They com-
peted for the support of the same type of mind and reserved
for each other the hatred of the heretic. But their practice
showed how closely they are related. To both, the real enemy,
the man with whom they had nothing in common and whom
they could not hope to convince, is the liberal of the old type.
While to the Nazi the communist, and to the communist
the Nazi, and to both the socialist, are potential recruits who
are made of the right timber, although they have listened to
false prophets, they both know that there can be no compromise
between them and those who really believe in individual
freedom.

Lest this be doubted by people misled by official propaganda
from either side, let me quote one more statement from an
authority that ought not to be suspect. In an article under the
significant title of “ The Rediscovery of Liberalism ”, Professor
Eduard Heimann, one of the leaders of German religious socialism,
writes :

Hitlerism proclaims itself as both true democracy and true social-
ism, and the terrible truth is that there is a grain of truth for such
claims — an infinitesimal grain, to be sure, but at any rate enough
to serve as a basis for such fantastic distortions. Hitlerism even
goes so far as to claim the r6le of protector of Christianity, and the
terrible truth is that even this gross misinterpretation is able to make
some impression. But one fact stands out with perfect clarity in
all the fog : Hitler has never claimed to represent true liberalism.
Liberalism then has the distinction of being the doctrine most hated
by Hitler. 1

It should be added that this hatred had little occasion to show
itself in practice merely because, by. the time Hitler came to

1 Social Research (New York), vol. VIII, no. 4, November 1941. — It deserves
to be recalled in this connection that, whatever may have been his reasons,
Hitler thought it expedient to declare in one of his public speeches as late as
February 1941 that “ basically National Socialism and Marxism are the same ”.
(Cf. The Bulletin of International News published by the Royal Institute of
International Affairs, vol. XVIII, no. 5, p. 269.)

THE GREAT UTOPIA 23

power, liberalism was to all intents and purposes dead in Germany.
And it was socialism that had killed it.

* * * # #

While to many who have watched the transition from socialism
to fascism at close quarters the connection between the two systems
has become increasingly obvious, in this country the majority of
people still believe that socialism and freedom can be combined.
There can be no doubt that most socialists here still believe
profoundly in the liberal ideal of freedom, and that they would
recoil if they became convinced that the realisation of their
programme would mean the destruction of freedom. So little
is the problem yet seen, so easily do the most irreconcilable ideals
still live together, that we can still hear such contradictions in
terms as “ individualist socialism ” seriously discussed. If this
is the state of mind which makes us drift into a new world,
nothing can be more urgent than that we should seriously examine
the real significance of the evolution that has taken place elsewhere.
Although our conclusions will only confirm the apprehensions
which others have already expressed, the reasons why this
development cannot be regarded as accidental will not appear
without a rather full examination of the main aspects of this
transformation of social life. That democratic socialism, the
great utopia of the last few generations, is not only unachievable,
but that to strive for it produces something so utterly different
that few of those who now wish it would be prepared to accept
the consequences, many will not believe till the connection has
been laid bare in all its aspects.

CHAPTER III

INDIVIDUALISM AND COLLECTIVISM

The socialists believe in two things which are absolutely
different and perhaps even contradictory : freedom and
organisation.

Elie HaUvy.

BEFORE we can progress with our main problem, an obstacle
has yet to be surmounted. A confusion largely responsible for
the way in which we are drifting into things which nobody
wants must be cleared up.

This confusion concerns nothing less than the concept of
socialism itself. It may mean, and is often used to describe,
merely the ideals of social justice, greater equality and security
which are the ultimate aims of socialism. But it means also the
particular method by which most socialists hope to attain these
ends and which many competent people regard as the only
methods by which they can be fully and quickly attained. In this
sense socialism means the abolition of private enterprise, of private
ownership of the means of production, and the creation of a
system of “ planned economy ” in which the entrepreneur
working for profit is replaced by a central planning body.

There are many people who call themselves socialists although
they care only about the first, who fervently believe in those
ultimate aims of socialism but neither care nor understand how
they can be achieved, and who are merely certain that they must
be achieved, whatever the cost. But to nearly all those to whom
socialism is not merely a hope but an object of practical politics,
the characteristic methods of modem socialism are as essential
as the ends themselves. Many people, on the other hand, who
value the ultimate ends of socialism no less than the socialists,
refuse to support socialism because of the dangers to other values
they see in the methods proposed by the socialists. The dispute
about socialism has thus become largely a dispute about means
and not about ends — although the question whether the dif-
ferent ends of socialism can be simultaneously achieved is also
involved.

This would be enough to create confusion. And the confusion
has been further increased by the common practice of denying
that those who repudiate the means value the ends. But this
is not all. The situation is still more complicated by the fact
that the same means, the “economic planning” which is the
prime instrument of socialist reform, can be used for many other

24

INDIVIDUALISM AND COLLECTIVISM 25

purposes. We must centrally direct economic activity if we want
to make the distribution of income conform to current ideas of
social justice. “ Planning ”, therefore, is wanted by all those
who demand that “ production for use ” be substituted for
production for profit. But such planning is no less indispensable
if the distribution of incomes is to be regulated in a way which
to us appears to be the opposite of just. Whether we should wish
that more of the good things of this world should go to some
racial elite, the Nordic men, or the members of a party or an
aristocracy, the methods which we shall have to employ are the
same as those which could ensure an equalitarian distribution.

It may, perhaps, seem unfair to use the term socialism to
describe its methods rather than its aims, to use for a particular
method a term which for many people stands for an ultimate ideal.
It is probably preferable to describe the methods which can be
used for a great variety of ends as collectivism and to regard
socialism as a species of that genus. Yet, although to most
socialists only one species of collectivism will represent true
socialism, it must always be remembered that socialism is a
species of collectivism and that therefore everything which is true
of collectivism as such must apply also to socialism. Nearly all
the points which are disputed between socialists and liberals
concern the methods common to all forms of collectivism and
not the particular ends for which socialists want to use them ;
and all the consequences with which we shall be concerned in
this book follow from the methods of collectivism irrespective of
the ends for which they are used. It must also not be forgotten
that socialism is not only by far the most important species of
collectivism or “ planning ” ; but that it is socialism which has
persuaded liberal-minded people to submit once more to that
regimentation of economic life which they had overthrown
because, in the words of Adam Smith, it puts governments in
a position where “ to support themselves they are obliged to be
oppressive and tyrannical ”A

# # # # *

The difficulties caused by the ambiguities of the common
political terms are not yet over if we agree to use the term
collectivism so as to include all types of “ planned economy ”,
whatever the end of planning. The meaning of this term
becomes somewhat more definite if we make it clear that we
mean that sort of planning which is necessary to realise any given
distributive ideals. But as the idea of central economic planning
owes its appeal largely to this very vagueness of its meaning, it is

1 Quoted in Dugald Stewart’s Memoir of Adam Smith from a memorandum
written by Smith in 1755.

B

THE ROAD TO SERFDOM

26

essential that we should agree on its precise sense before we
discuss its consequences.

“ Planning ” owes its popularity largely to the fact that every-
body desires, of course, that we should handle our common
problems as rationally as possible, and that in so doing we should
use as much foresight as we can command. In this sense every-
body who is not a complete fatalist is a planner, every political
act is (or ought to be) an act of planning, and there can be
differences only between good and bad, between wise and fore-
sighted and foolish and short-sighted planning. An economist,
whose whole task is the study of how men actually do and how
they might plan their affairs, is the last person who could
object to planning in this general sense. But it is not in this
sense that our enthusiasts for a planned society now employ
this term, nor merely in this sense that we must plan if we want
the distribution of income or wealth to conform to some particular
standard. According to the modern planners, and for their
purposes, it is not sufficient to design the most rational permanent
framework within which the various activities would be conducted
by different persons according to their individual plans. This
liberal plan, according to them, is no plan — and it is indeed not
a plan designed to satisfy particular views about who should have
what. What our planners demand is a central direction of all
economic activity according to a single plan, laying down how
the resources of society should be “ consciously directed ” to
serve particular ends in a definite way.

The dispute between the modern planners and their opponents
is, therefore, not a dispute on whether we ought to choose intelli-
gently between the various possible organisations of society ; it
is not a dispute on whether we ought to employ foresight and
systematic thinking in planning our common affairs. It is a
dispute about what is the best way of so doing. The question
is whether for this purpose it is better that the holder of. coercive
power should confine himself in general to creating conditions
under which the knowledge and initiative of individuals is
given the best scope so that they can plan most successfully ; or
whether a rational utilisation of our resources requires central
direction and organisation of all our activities according to some
consciously constructed “ blueprint ”. The socialists of all
parties have appropriated the term planning for planning of
the latter type and it is now generally accepted in this sense.
But though this is meant to suggest that this is the only rational
way of handling our affairs, it does not of course prove this.
It remains the point on which the planners and the liberals
disagree.

INDIVIDUALISM AND COLLECTIVISM 27

It is important not to confuse opposition against this kind of
planning with a dogmatic laissez-faire attitude. The liberal
argument is in favour of making the best possible use of the
forces of competition as a means of co-ordinating human efforts,
not an argument for leaving things just as they are. It is based
on the conviction that where effective competition can be created,
it is a better way of guiding individual efforts than any other.
It does not deny, but even emphasises, that, in order that com-
petition should work beneficially, a carefully thought-out legal
framework is required, and that neither the existing nor the past
legal rules are free from grave defects. Nor does it deny that
where it is impossible to create the conditions necessary to make
competition effective, we must resort to other methods of guiding
economic activity. Economic liberalism is opposed, however, to
competition being supplanted by inferior methods of co-ordinating
individual efforts. And it regards competition as superior not
only because it is in most circumstances the most efficient method
known, but even more because it is the only method by which
our activities can be adjusted to each other without coercive or
arbitrary intervention of authority. Indeed, one of the main
arguments in favour of competition is that it dispenses with the
need for “ conscious social control ” and that it gives the indi-
viduals a chance to decide whether the prospects of a particular
occupation are sufficient to compensate for the disadvantages and
risks connected with it.

The successful use of competition as the principle of social
organisation precludes certain types of coercive interference with
economic life, but it admits of others which sometimes may very
considerably assist its work and even requires certain kinds of
government action. But there is good reason why the negative
requirements, the points where coercion must not be used, have
been particularly stressed. It is necessary in the first instance
that the parties in the market should be free to sell and buy at
any price at which they can find a partner to the transaction,
and that anybody should be free to produce, sell, and buy anything
that may be produced or sold at all. And it is essential that the
entry into the different trades should be open to all on equal
terms, and that the law should not tolerate any attempts by
individuals or groups to restrict this entry by open or concealed
force. Any attempt to control prices or quantities of particular
commodities deprives competition of its power of bringing about
an effective co-ordination of individual efforts, because price
changes then cease to register all the relevant changes in circum-
stances and no longer provide a reliable guide for the individual’s
actions.

This is not necessarily true, however, of measures merely

28 THE ROAD TO SERFDOM

restricting the allowed methods of production, so long as these
restrictions affect all potential producers equally and are not used
as an indirect way of controlling prices and quantities. Though
all such controls of the methods or production impose extra costs,
i.e. make it necessary to use more resources to produce a given
output, they may be well worth while. To prohibit the use of
certain poisonous substances, or to require special precautions in
their use, to limit working hours or to require certain sanitary
arrangements, is fully compatible with the preservation of com-
petition. The only question here is whether in the particular
instance the advantages gained are greater than the social costs
which they impose. Nor is the preservation of competition
incompatible with an extensive system of social services — so long
as the organisation of these services is not designed in such a way
as to make competition ineffective over wide fields.

It is regrettable, though not difficult to explain, that in the past
much less attention has been given to the positive requirements of
a successful working of the competitive system than to these
negative points. The functioning of competition not only requires
adequate organisation of certain institutions like money, markets,
and channels of information — some of which can never be
adequately provided by private enterprise — but it depends above
all on the existence of an appropriate legal system, a legal system
designed both to preserve competition and to make it operate
as beneficially as possible. It is by no means sufficient that the
law should recognise the principle of private property and freedom
of contract ; much depends on the precise definition of the right
of property as applied to different things. The systematic study
of the forms of legal institutions which will make the competitive
system work efficiently has been sadly neglected ; and strong
arguments can be advanced that serious shortcomings here,
particularly with regard to the law of corporations and of patents,
have not only made competition work less effectively than
it might have done, but have even led to the destruction of
competition in many spheres.

There are, finally, undoubted fields where no legal arrangements
can create the main condition on which the usefulness of the
system of competition and private property depends : namely",
that the owner benefits from all the useful services rendered by
his property and suffers for all the damages caused to others by
its use. Where, for example, it is impracticable to make the
enjoyment of certain services dependent on the payment of a
price, competition will not produce the services ; and the price
system becomes similarly ineffective when the damage caused to
others by certain uses of property cannot be effectively charged
to the owner of that property. In all these instances there is

INDIVIDUALISM AND COLLECTIVISM 29

a divergence between the items which enter into private calculation
and those which affect social welfare ; and whenever this diver-
gence becomes important some method other than competition
may have to be found to supply the services in question. Thus
neither the provision of signposts on the roads, nor, in most
circumstances, that of the roads themselves, can be paid for by
every individual user. Nor can certain harmful effects of de-
forestation, or of some methods of farming, or of the smoke
and noise of factories, be confined to the owner of the property
in question or to those who are willing to submit to the damage
for an agreed compensation. In such instances we must find
some substitute for the regulation by the price mechanism.
But the fact that we have to resort to the substitution of direct
regulation by authority where the conditions for the proper
working of competition cannot be created, does not prove that
we should suppress competition where it can be made to
function.

To create conditions in which competition will be as effective
as possible, to supplement it where it cannot be made effective,
to provide the services which, in the words of Adam Smith,
“ though they may be in the highest degree advantageous to a
great society, are, however, of such a nature, that the profit
could never repay the expense to any individual or small number
of individuals ”, these tasks provide indeed a wide and unques-
tioned field for state activity. In no system that could be ration-
ally defended would the state just do nothing. An effective
competitive system needs an intelligently designed and con-
tinuously adjusted legal framework as much as any other. Even
the most essential prerequisite of its proper functioning, the
prevention of fraud and deception (including exploitation of
ignorance) provides a great and by no means yet fully accomplished
object of legislative activity.

* * # * m

The task of creating a suitable framework for the beneficial
working of competition had, however, not yet been carried very
far when states everywhere turned from it to that of supplanting
competition by a different and irreconcilable principle. The
question was no longer one of making competition work and of
supplementing it, but of displacing it altogether. It is important
to be quite clear about this : the modern movement for planning
is a movement against competition as such, a new flag under
which all the old enemies of competition have rallied. And
although all sorts of interests are now trying to re-establish under
this flag privileges which the liberal era swept away, it is socialist
propaganda for planning which has restored to respectability

THE ROAD TO SERFDOM

30

among liberal-minded people opposition to competition, and
which has effectively lulled the healthy suspicion which any
attempt to smother competition used to arouse . 1 What in effect
unites the socialists of the Left and the Right is this common
hostility to competition and their common desire to replace it
by a directed economy. Though the terms capitalism and
socialism are still generally used to describe the past and the
future forms of society, they conceal rather than elucidate the
nature of the transition through which we are passing.

Yet, though all the changes we are observing tend in the
direction of a comprehensive central direction of economic
activity, the universal struggle against competition promises to
produce in the first instance something in many respects even
worse, a state of affairs which can satisfy neither planners nor
liberals : a sort of syndicalist or “ corporative ” organisation of
industry, in which competition is more or less suppressed but
planning is left in the hands of the independent monopolies of
the separate industries. This is the inevitable first result of a
situation in which the people are united in their hostility to
competition but agree on little else. By destroying competition
in industry after industry, this policy puts the consumer at the
mercy of the joint monopolist action of capitalists and workers
in the best organised industries. Yet, although this is a state
of affairs which in wide fields has already existed for some time,
and although much of the muddled (and most of the interested)
agitation for planning aims at it, it is not a state which is likely
to persist or can be rationally justified. Such independent
planning by industrial monopolies would, in fact, produce effects
opposite to those at which the argument for planning aims. Once
this stage is reached the only alternative to a return to competition
is the control of the monopolies by the state, a control which, if it
is to be made effective, must become progressively more complete
and more detailed. It is this stage we are rapidly approaching.
When, shortly before the war, one of the weeklies pointed out that

1 Of late, it is true, some academic socialists, under the spur of criticism, and
animated by the same fear of the extinction of freedom in a centrally planned
society, have devised a new kind of “ competitive socialism ” which they hope
will avoid the difficulties and dangers of central planning and combine the
abolition of private property with the full retention of individual freedom.
Although some discussion of this new kind of socialism has taken place in
learned journals, it is hardly likely to recommend itself to practical politicians.
If it ever did, it would not be difficult to show (as the author has attempted
elsewhere — see Economica, 1940) that these plans rest on a delusion and suffer
from an inherent contradiction. It is impossible to assume control over all
the productive resources without also deciding for whom and by whom they
are to be used. Although, under this so-called competitive socialism, the
planning by the central authority would take somewhat more roundabout forms,
its effects would not be fundamentally different, and the element of competition
would be little mote than a sham.

' INDIVIDUALISM AND COLLECTIVISM 3 1

“ there were many signs that British leaders are growing accus-
tomed to thinking in terms of national development by controlled
monopolies ”, 1 this was probably a true estimate of the position
as it then existed. Since then this process has been greatly
accelerated by the war, and its grave defects and dangers will
become increasingly obvious as time goes on.

The idea of complete centralisation of the direction of economic
activity still appalls most people, not only because of the stupendous
difficulty of the task, but even more because of the horror inspired
by the idea of everything being directed from a single centre.
If we are nevertheless rapidly moving towards such a state
this is largely because most people still believe that it must be
possible to find some Middle Way between “ atomistic ” com-
petition and central direction. Nothing indeed seems at first
more plausible, or is more likely to appeal to reasonable people,
than the idea that our goal must be neither the extreme decentral-
isation of free competition, nor the complete centralisation of a
single plan, but some judicious mixture of the two methods.
Yet mere common sense proves a treacherous guide in this field.
Although competition can bear some admixture of regulation, it
cannot be combined with planning to any extent we like without
ceasing to operate as an effective guide to production. Nor is
“ planning ” a medicine which, taken in small doses, can produce
the effects for which one might hope from its thoroughgoing
application. Both competition and central direction become
poor and inefficient tools if they are incomplete ; they are alterna-
tive principles used to solve the same problem, and a mixture
of the two means that neither will really work and that the result
will be worse than if either system had been consistently relied
upon. Or, to express it differently, planning and competition
can be combined only by planning for competition, but not by
planning against competition.

It is of the utmost importance to the argument of this book
for the reader to keep in mind that the planning against which
all our criticism is directed is solely the planning against com-
petition — the planning which is to be substituted for competition.
This is the more important as we cannot, within the scope of
this book, enter into a discussion of the very necessary planning
which is required to make competition as effective and beneficial
as possible. But as in current usage “ planning ” has become
almost synonymous with the former kind of planning, it will
sometimes be inevitable for the sake of brevity to refer to it
simply as planning, even though this means leaving to our
opponents a very good word meriting a better fate.

1 The Spectator, March 3rd, 1939, p. 337.

CHAPTER IV

THE “INEVITABILITY” OF PLANNING

We were the first to assert that the more complicated the
forms of civilisation, the more restricted the freedom of the
individual must become.

B. Mussolini.

IT is a revealing fact that few planners are content to say that
central planning is desirable. Most of them affirm that we can
no longer choose but are compelled by circumstances beyond our
control to substitute planning for competition. The myth is
deliberately cultivated that we are embarking on the new course
not out of free will but because competition is spontaneously
eliminated by technological changes which we neither can reverse
nor should wish to prevent. This argument is rarely developed
at any length — it is one of the assertions taken over by one writer
from another till, by mere iteration, it has come to be accepted
as an established fact. It is, nevertheless, devoid of foundation.
The tendency towards monopoly and planning is not the result
of any “ objective facts ” beyond our control, but the product
of opinions fostered and propagated for half a century till they
have come to dominate all our policy.

Of the various arguments employed to demonstrate the inevita-
bility of planning, the one most frequently heard is that techno-
logical changes have made competition impossible in a constantly
increasing number of fields, and that the only choice left to us is
between control of production by private monopolies and direction
by the government. This belief derives mainly from the Marxist
doctrine of the “ concentration of industry ”, although, like so
many Marxist ideas, it is now found in many circles who have
received it at third or fourth hand and do not know whence it
derives.

The historical fact of the progressive growth of monopoly
during the last fifty years and the increasing restriction of the field
in which competition rules is, of course, not disputed — although
the extent of the phenomenon is often greatly exaggerated . 1 The
important question is whether this development is a necessary
consequence of the advance of technology, or whether it is simply
the result of the policies pursued in most countries. We shall
presently see that the actual history of this development strongly

1 For a fuller discussion of these problems see Professor L. Robbins’s essay-
on “ The Inevitability of Monopoly ” in The Economic Basis of Class Conflict,
1939. PP- 45-8°.

3 *

THE “ INEVITABILITY ” OF PLANNING 33

suggests the latter. But we must first consider in how far
modern technological developments are of such a kind as to make
the growth of monopolies in wide fields inevitable.

The alleged technological cause of the growth of monopoly is
the superiority of the large firm over the small, due to the greater
efficiency of modern methods of mass production. Modern
methods, it is asserted, have created conditions in the majority
of industries where the production of the large firm can be
increased at decreasing costs per unit, with the result that the
large firms are everywhere underbidding and driving out the
small ones ; this process must go on till in each industry only
one or at most a few giant firms are left. This argument singles
out one effect sometimes accompanying technological progress ;
it disregards others which work in the opposite direction ; and it
receives little support from a serious study of the facts. We
cannot here investigate this question in detail and must be content
to accept the best evidence available. The most comprehensive
study of the facts undertaken in recent times is that of the
American “ Temporary National Economic Committee ” on the
Concentration of Economic Power. The final report of this Com-
mittee (which certainly cannot be accused of an undue liberal
bias) arrives at the conclusion that the view according to which
the greater efficiency of large-scale production is the cause of the
disappearance of competition “ finds scant support in any evidence
that is now at hand ”A And the detailed monograph on the
question which was prepared for the Committee sums up the
answer in this statement :

The superior efficiency of large establishments has not been
demonstrated ; the advantages that are supposed to destroy com-
petition have failed to manifest themselves in many fields. Nor do
the economies of size, where they exist, invariably necessitate
monopoly. . . . The size or the sizes of the optimum efficiency
may be reached long before the major part of a supply is subjected
to such control. The conclusions that the advantage of large-scale
production must lead inevitably to the abolition of competition
cannot be accepted. It should be noted, moreover, that monopoly
is frequently the product of factors ■ other than the lower costs of
greater size. It is attained through collusive agreement and pro-
moted by public policies. When these agreements are invalidated
and when these policies are reversed, competitive conditions can
be restored. 2

An investigation of conditions in this country would lead to
very similar results. Anyone who has observed how aspiring

1 Final Report and Recommendations of the Temporary National Economic
Committee, 77th Congress, 1st Session, Senate Document No. 35, 1941, p. 89.

‘ C. Wilcox, Competition and Monopoly in American Industry, Temporary
National Economic Committee, Monograph No. 21, 1940, p. 314.

34 the road to serfdom

monopolists regularly seek and frequently obtain the assistance
of the power of the state to make their control effective can have
little doubt that there is nothing inevitable about this development.

# * # * #

This conclusion is strongly supported by the historical order
in which the decline of competition and the growth of monopoly
manifested themselves in different countries. If they were the
result of technological developments or a necessary product of
the evolution of “ capitalism ”, we should expect them to appear
first in the countries with the most advanced economic system.
In fact they appeared first during the last third of the nineteenth
century in what were then comparatively young industrial
countries, the United States and Germany. In the latter country
especially, which came to be regarded as the model country
typifying the necessary evolution of capitalism, the growth
of cartels and syndicates has since 1878 been systematically
fostered by deliberate policy. Not only the instrument of pro-
tection, but direct inducements and ultimately compulsion, were
used by the governments to further the creation of monopolies
for the regulation of prices and sales. It was here that, with the
help of the state, the first great experiment in “ scientific planning ”
and “ conscious organisation of industry ” led to the creation of
giant monopolies, which were represented as. inevitable growths
fifty years before the same was done in Great Britain. It is
largely due to the influence of German socialist theoreticians,
particularly Sombart, generalising from the experience of their
country, that the inevitable development of the competitive
system into “ monopoly capitalism ” became widely accepted.
That in the United States a highly protectionist policy made
a somewhat similar development possible, seemed to confirm
this generalisation. The development of Germany, however,
more than that of the United States, came to be regarded as
representative of a universal tendency ; and it became a common-
place to speak — to quote a widely read political essay of recent
date — of “ Germany where all the social and political forces of
modern civilisation have reached their most advanced form ”. 1

How little there was of inevitability in all this, and how much
is the result of deliberate policy, becomes clear when we consider
the position in this country till 1931 and the development since
that year in which Great Britain also embarked upon a policy of
general protection. It is only a dozen years since, except for a
few industries which had obtained protection earlier, British
industry was on the whole as competitive as, perhaps, at any time
in its history. And, although during the 1920’s it suffered
1 R. Niebuhr, Moral Man and Immoral Society, 1932.

THE “ INEVITABILITY ” OF PLANNING 35

severely from incompatible policies followed with regard to wages
and to money, at least the years till 1929 compare with regard to
employment and general activity not unfavourably with the 1930’s.
It is only since the transition to protection and the general change
in British economic policy accompanying it, that the growth
of monopolies has proceeded at an amazing rate and has trans-
formed British industry to an extent the public has scarcely yet
realised. To argue that this development has anything to do
with the technological progress during this period, that techno-
logical necessities which in Germany operated in the i88o’s and
1890’s, made themselves felt here in the i93o’s, is not much less
absurd than the claim, implied in the statement of Mussolini
(quoted at the head of this chapter) that Italy had to abolish
individual freedom before other European people because its
civilisation had marched so far in advance of the rest !

In so far as this country is concerned, the thesis that the change
in opinion and policy merely follows an inexorable change in the
facts can be given a certain appearance of truth, just because
England has followed at a distance the intellectual developments
elsewhere. It could thus be argued that monopolistic organisation
of industry grew up in spite of the fact that public opinion still
favoured competition, but that outside events frustrated their
wishes. The true relation between theory and practice becomes,
however, clear as soon as we look to the prototype of this develop-
ment, Germany. That there the suppression of competition was
a matter of deliberate policy, that it was undertaken in the service
of the ideal which we now call planning, there can be no doubt.
In the progressive advance towards a completely planned society
the Germans, and all the people who are imitating their example,
are merely following the course which nineteenth-century thinkers,
particularly Germans, have mapped out for them. The intel-
lectual history of the last sixty or eighty years is indeed a perfect
illustration of the truth that in social evolution nothing is inevitable
but thinking makes it so.

* * * * *

The assertion that modern technological progress makes
planning inevitable can also be interpreted in a different manner.
It may mean that the complexity of our modern industrial
civilisation creates new problems with which we cannot hope to
deal effectively except by central planning. In a sense this is
true — yet not in the wide sense in which it is claimed. It is, for
example, a commonplace that many of the problems created by
a modern town, like many other problems caused by close
contiguity in space, are not adequately solved by competition.
But it is not these problems, like those of the “ public utilities ”,

36 THE ROAD TO SERFDOM

etc., which are uppermost in the minds of those who invoke the
complexity of modern civilisation as an argument for central
planning. What they generally suggest is that the increas-
ing difficulty of obtaining a coherent picture of the complete
economic process makes it indispensable that things should be
co-ordinated by some central agency if social life is not to dis-
solve in chaos.

This argument is based on a complete misapprehension of the
working of competition. Far from being appropriate only to
comparatively simple conditions, it is the very complexity of the
division of labour under modern conditions which makes com-
petition the only method by which such co-ordination can be
adequately brought about. There would be no difficulty about
efficient control or planning were conditions so simple that a
single person or board could effectively survey all the relevant
facts. It is only as the factors which have to be taken into account
become so numerous that it is impossible to gain a synoptic view
of them, that decentralisation becomes imperative. But once
decentralisation is necessary, the problem of co-ordination arises,
a co-ordination which leaves the separate agencies free to adjust
their activities to the facts which only they can know, and yet
brings about a mutual adjustment of their respective plans. As
decentralisation has become necessary because nobody can con-
sciously balance all the considerations bearing on the decisions
of so many individuals, the co-ordination can clearly not be
effected by “ conscious control ”, but only by arrangements
which convey to each agent the information he must possess in
order effectively to adjust his decisions to those of others. And
because all the details of the changes constantly affecting the
conditions of demand and supply of the different commodities
can never be fully known, or quickly enough be collected and
disseminated, by any one centre, what is required is some appa-
ratus of registration which automatically records all the relevant
effects of individual , actions, and whose indications are at the
same time the resultant of, and the guide for, all the individual
decisions.

This is precisely what the price system does under competition,
and which no other system even promises to accomplish. It enables
entrepreneurs, by watching the movement of comparatively few
prices, as an engineer watches the hands of a few dials, to adjust
their activities to those of their fellows. The important point
here is that the price system will fulfil this function only if com-
petition -prevails, that is, if the individual producer has to adapt
himself to price changes and cannot control them. The more
complicated the whole, the more dependent we become on that
division of knowledge between individuals whose separate efforts

THE “ INEVITABILITY ” OF PLANNING 37

are co-ordinated by the impersonal mechanism for transmitting
the relevant information known by us as the price system.

It is no exaggeration to say that if we had had to rely on conscious
central planning for the growth of our industrial system, it would
never have reached the degree of differentiation, complexity, and
flexibility it has attained. Compared with this method of solving
the economic problem by means of decentralisation plus automatic
co-ordination, the more obvious method of central direction is
incredibly clumsy, primitive, and limited in scope. That the
division of labour has reached the extent which makes modern
civilisation possible we owe to the fact that it did not have to be
consciously created, but that man tumbled on a method by which
the division of labour could be extended far beyond the limits
within which it could have been planned. Any further growth of
its complexity, therefore, far from making central direction more
necessary, makes it more important than ever that we should use
a technique which does not depend on conscious control.

* # * * #

There is yet another theory which connects the growth of
monopolies with technological progress, and which uses arguments
almost opposite to those we have just considered ; though not
often clearly stated, it has also exercised considerable influence.
It contends, not that modern technique destroys competition, but
that, on the contrary, it will be impossible to make use of many of
the new technological possibilities unless protection against com-
petition is granted, i.e., a monopoly is conferred. This type of
argument is not necessarily fraudulent, as the critical reader will
perhaps suspect : the obvious answer, that if a new technique
for satisfying our wants is really better, it ought to be able to
stand up against all competition, does not dispose of all instances
to which this argument refers. No doubt in many cases it is
used merely as a form of special pleading by interested parties.
Even more often it is probably based on a confusion between
technical excellence from a narrow engineering point of view and
desirability from the point of view of society as a whole.

There remains, however, a group of instances where the argu-
ment has some force. It is, for example, at least conceivable that
the British automobile industry might be able to supply a car
cheaper and better than cars used to be in the United States if
everyone in this country were made to use the same kind of car ;
or that the use of electricity for all purposes could be made cheaper
than coal or gas if everybody could be made to use only electricity.
In instances like these it is at least possible that we might all be
better off, and should prefer the new situation if we had the choice
— but that no individual ever gets the choice, because the alterna-

THE ROAD TO SERFDOM

38

tive is that either we should all use the same cheap car (or all
should use only electricity), or that we should have the choice
between these things with each of them at a much higher price.
I do not know whether this is true in either of the instances given.
But it must be admitted that it is possible that by compulsory
standardisation or the prohibition of variety beyond a certain
degree, abundance might be increased in some fields more than
sufficiently to compensate for the restriction of the choice of the
consumer. It is even conceivable that a new invention may be
made some day whose adoption would seem unquestionably
beneficial, but which could be used only if many or all people
were made to avail themselves of it at the same time.

Whether such instances are of any great or lasting importance,
they are certainly not instances where it could be legitimately
claimed that technical progress makes central direction inevitable.
They would merely make it necessary to choose between gaining
a particular advantage by compulsion and not obtaining it — or,
in most instances, obtaining it a little later, when further technical
advance has overcome the particular difficulties. It is true that
in such situations we may have to sacrifice a possible immediate
gain as the price of our freedom — but we avoid, on the other hand,
the necessity of making future developments dependent upon the
knowledge which particular people now possess. By sacrificing
such possible present advantages we preserve an important
stimulus to further progress. Though in the short run the price
we have to pay for variety and freedom of choice may sometimes
be high, in the long run even material progress will depend on
this very variety, because we can never predict from which of
the many forms in which a good or service can be provided
something better may develop. It cannot, of course, be asserted
that the preservation of freedom at the expense of some addition
to our present material comfort will be thus rewarded in all
instances. But the argument for freedom is precisely that we
ought to leave room for the unforeseeable free growth. It applies,
therefore, no less when, on the basis of our present knowledge,
compulsion would seem to bring only advantages, and although
in a particular instance it may actually do no harm.

In much of the current discussion on the effects of technological
progress this progress is presented to us as if it were something
outside us which could compel us to use the new knowledge in
a particular way. While it is true, of course, that inventions
have given us tremendous power, it is absurd to suggest that we
must use this power to destroy our most precious inheritance :
liberty. It does mean, however, that if we want to preserve it,
we must guard it more jealously than ever and that we must be
prepared to make sacrifices for it. While there is nothing in

THE “ INEVITABILITY ” OF PLANNING 39

modem technological developments which forces us towards
comprehensive economic planning, there is a great deal in them
which makes infinitely more dangerous the power a planning-
authority would possess.

# * * * #

While there can thus be little doubt that the movement towards
planning is the result of deliberate action and that there are no
external necessities which force us to it, it is worth enquiring why
so large a proportion of the technical experts should be found in
the front rank of the planners. The explanation of this pheno-
menon is closely connected with an important fact which the
critics of the planners should always keep in mind : that there is
little question that almost every one of the technical ideals of our
experts could be realised within a comparatively short time if to
achieve them were made the sole aim of humanity. There is an
infinite number of good things, which we all agree are highly
desirable as well as possible, but of which we cannot hope to
achieve more than a few within our lifetime, or which we can
hope to achieve only very imperfectly. It is the frustration of
his ambitions in his own field which makes the specialist revolt
against the existing order. We all find it difficult to bear to see
things left undone which everybody must admit are both desir-
able and possible. That these things cannot all be done at the
same time, that any one of them can be achieved only at the
sacrifice of others, can be seen only by taking into account factors
which fall outside any specialism, which can be appreciated only
by a painful intellectual effort — the more painful as it forces us
to see against a wider background the objects to which most of
our labours are directed, and to balance them against others which
lie outside our immediate interest and for which, for that reason,
we care less.

Every one of the many aims which, considered in isolation, it
would be possible to achieve in a planned society, creates enthu-
siasts for planning who feel confident that they will be able to instil
into the directors of such a society their sense of the value of the
particular objective ; and the hopes of some of them would
undoubtedly be fulfilled, since a planned society would certainly
further some objectives more than is the case at present. It
would be foolish to deny that the instances of planned or semi-
planned societies which we know do furnish illustrations in point,
good things which the people of these countries owe entirely to
planning. The magnificent motor roads in Germany and Italy
are an instance often quoted — even though they do not represent
a kind of planning not equally possible in a liberal society. But
it is equally foolish to quote such instances of technical excellence

THE ROAD TO SERFDOM

40

in particular fields as evidence of the general superiority of
planning. It would be more correct to say that such extreme
technical excellence out of line with general conditions is evidence
of a misdirection of resources. Anyone who has driven along
the famous German motor roads and found the amount of traffic
on them less than on many a secondary road in. England, can have
little doubt that, so far as peace purposes are concerned, there was
little justification for them. Whether it was not a case where the
planners decided in favour of “ guns ” instead of “ butter ” is
another matter . 1 But by our standards there is little ground for
enthusiasm.

The illusion of the specialist that in a planned society he would
secure more attention to the objectives for which he cares most
is a more general phenomenon than the term of specialist at first
suggests. In our predilections and interests we are all in some
measure specialists. And we all think that our personal order
of values is not merely personal, but that in a free discussion
among rational people we would convince the others that ours is
the right one. The lover of the country-side who wants above
all that its traditional appearance should be preserved and that
the blots already made by industry on its fair face should be
removed, no less than the health enthusiast who wants all the
picturesque but insanitary old cottages cleared away, or the
motorist who wishes the country cut up by big motor roads, the
efficiency fanatic who desires the maximum of specialisation and
mechanisation no less than the idealist who for the development
of personality wants to preserve as many independent craftsmen
as possible, all know that their aim can be fully achieved only
by planning — and they all want planning for that reason. But, of
course, the adoption of the social planning for which they clamour
can only bring out the concealed conflict between their aims.

The movement for planning owes its present strength largely
to the fact that, while planning is in the main still an ambition,
it unites almost all the single-minded idealists, all the men and
women who have devoted their lives to a single task. The hopes
they place in planning, however, are not the result of a compre-
hensive view of society, but rather of a very limited view, and
often the result of a great exaggeration of the importance of the
ends they place foremost. This is not to underrate the great
pragmatic value of this type of men in a free society like ours,
which makes them the subject of just admiration. But it would
make the very men who are most anxious to plan society the
most dangerous if they were allowed to do so — and the most
intolerant of the planning of others. From the saintly and single-

1 But as I am correcting this the news comes that maintenance work on the
German motor roads has been suspended I

THE “ INEVITABILITY ” OF PLANNING 41

minded idealist to the fanatic is often but a step. Though it is
the resentment of the frustrated specialist which gives the demand
for planning its strongest impetus, there could hardly be a more
unbearable — and more irrational — world than one in which the
most eminent specialists in each field were allowed to proceed
unchecked with the realisation of their ideals. Nor can “ co-
ordination ”, as some planners seem to imagine, become a new
specialism. The economist is the last to claim that he has the
knowledge which the co-ordinator would need. His plea is for
a method which effects such co-ordination without the need for
an omniscient dictator. But that means precisely the retention
of some such impersonal and often unintelligible checks on
individual efforts as those against which all specialists chafe.

CHAPTER V

PLANNING AND DEMOCRACY

The statesman who should attempt to direct private people
in what manner they ought to employ their capitals, would not
only load himself with a most unnecessary attention, but
assume an authority which could safely be trusted to no council
and senate whatever, and which would nowhere be so dangerous
fis in the hands of a man who had folly and presumption enough
to fancy himself fit to exercise it.

Adam Smith.

THE common features of all collectivist systems may be described,
in a phrase ever dear to socialists of all schools, as the deliberate
organisation of the labours of society for a definite social goal.
That our present society lacks such “ conscious ” direction
towards a single aim, that its activities are guided by the whims
and fancies of irresponsible individuals, has always been one of
the main complaints of its socialist critics.

In many ways this puts the basic issue very clearly. And it
directs us at once to the point where the conflict arises between
individual freedom and collectivism. The various kinds of
collectivism, communism, fascism, etc., differ between them-
selves in the nature of the goal towards which they want to direct
the efforts of society. But they all differ from liberalism and
individualism in wanting to organise the whole of society and
all its resources for this unitary end, and in refusing to recognise
autonomous spheres in which the ends of the individuals are
supreme. In short, they are totalitarian in the true sense of
this new word which we have adopted to describe the unexpected
but nevertheless inseparable manifestations of what in theory
we call collectivism.

The “ social goal ”, or “ common purpose ”, for which society
is to be organised, is usually vaguely described as the “ common
good ”, or the “ general welfare ”, or the “ general interest ”.
It does not need much reflection to see that these terms have
no sufficiendy definite meaning to determine a particular course
of action. The welfare and the happiness of millions cannot be
measured on a single scale of less and more. The welfare of a
people, like the happiness of a man, depends on a great many
things that can be provided in an infinite variety of combina-
tions. It cannot be adequately expressed as a single end, but
only as a hierarchy of ends, a comprehensive scale of values in
which every need of every person is given its place. To direct
all our activities according to a single plan presupposes that

42

PLANNING AND DEMOCRACY

- 43

every one of our needs is given its rank in an order of values
which must be complete enough to make it possible to decide
between all the different courses between which the planner has
to choose. It presupposes, in short, the existence of a complete
ethical code in which all the different human values are allotted
their due place.

The conception of a complete ethical code is unfamiliar and
it requires some effort of imagination to see what it involves.
We are not in the habit of thinking of moral codes as more or
less complete. The fact that we are constantly choosing between
different values without a social code prescribing how we ought
to choose, does not surprise us, and does not suggest to us that
our moral code is incomplete. In our society there is neither
occasion nor reason why people should develop common views
about what should be done in such situations. But where all the
means to be used are the property of society, and are to be used
in the name of society according to a unitary plan, a “ social ” view
about what ought to be done must guide all decisions. In such
a world we should soon find that our moral code is full of gaps.

We are not concerned here with the question whether it would
be desirable to have such a complete ethical code. It may
merely be pointed out that up to the present the growth of
civilisation has been accompanied by a steady diminution of the
sphere in which individual actions are bound by fixed rules.
The rules of which our common moral code consists have pro-
gressively become fewer and more general in character. From
the primitive man who was bound by an elaborate ritual in
almost every one of his daily activities, who was limited by in-
numerable taboos, and who could scarcely conceive of doing things
in a way different from his fellows, morals have more and more
tended to become merely limits circumscribing the sphere within
which the individual could behave as he liked. The adoption
of a common ethical code comprehensive enough to determine
a unitary economic plan would mean a complete reversal of this
tendency.

The essential point for us is that no such complete ethical
code exists. The attempt to direct all economic activity accord-
ing to a single plan would raise innumerable questions to which
the answer could be provided only by a moral rule, but to which
existing morals have no answer and where there exists no agreed
view on what ought to be done. People will have either no
definite views or conflicting views on such questions, because
in the free society in which we have lived there has been no
occasion to think about them and still less to form common
opinions about them.

44 the road to serfdom

Not only do we not possess such an all-inclusive scale of
values : it would be impossible for any mind to comprehend the
infinite variety of different needs of different people which com-
pete for the available resources and to attach a definite weight
to each. For our problem it is of minor importance whether
the ends for which any person cares comprehend only his own
individual needs, or whether they include the needs of his closer
or even those of his more distant fellows — that is, whether he
is egoistic or altruistic in the ordinary senses of these words.
The point which is so important is the basic fact that it is impos-
sible for any man to survey more than a limited field, to be aware
of the urgency of more than a limited number of needs.- Whether
his interests centre round his own physical needs, or whether
he takes a warm interest in the welfare of every human being he
knows, the ends about which he can be concerned will always
be only an infinitesimal fraction of the needs of all men.

This is the fundamental fact on which the whole philosophy
of individualism is based. It does not assume, as is often
asserted, that man is egoistic or selfish, or ought to be. It merely
starts from the indisputable fact that the limits of our powers
of imagination make it impossible to include in our scale of
values more than a sector of the needs of the whole society,
and that, since, strictly speaking, scales of value can exist only
in individual minds, nothing but partial scales of values exist,
scales which are inevitably different and often inconsistent with
each other. From this the individualist concludes that the
individuals should be allowed, within defined limits, to follow
their own values and preferences rather than somebody else’s,
that within these spheres the individual’s system of ends should
be supreme and not subject to any dictation by others. It is
this recognition of the individual as the ultimate judge of his
ends, the belief that as far as possible his own views ought to
govern his actions, that forms the essence of the individualist
position.

This view does not, of course, exclude the recognition of
social ends, or rather of a coincidence of individual ends which
makes it advisable for men to combine for their pursuit. But
it limits such common action to the instances where individual
views coincide ; what are called “ social ends ” are for it merely
identical ends of many individuals — or ends to the achievement
of which individuals are willing to contribute in return for the
assistance they receive in the satisfaction of their own desires.
Common action is thus limited to the fields where people agree
on common ends. Very frequently these common ends will not
be ultimate ends to the individuals, but means which different
persons can use for different purposes. In fact, people are most

PLANNING AND DEMOCRACY 45

likely to agree on common action where the common end is
not an ultimate end to them, but a means capable of serving
a great variety of purposes.

When individuals combine in a joint effort to realise ends they
have in common, the organisations, like the state, that they form
for this purpose, are given their own system of ends and their own
means. But any organisation thus formed remains one “ person ”
among others, in the case of the state much more powerful than
any of the others, it is true, yet still with its separate and limited
sphere in which alone its ends are supreme. The limits of this
sphere are determined by the extent to which the individuals
agree on particular ends ; and the probability that they will
agree on a particular course of action necessarily decreases as
the scope of such action extends. There are certain functions
of the state on the exercise of which there will be practical
unanimity among its citizens ; there will be others on which
there will be agreement of a substantial majority ; and so on,
till we come to fields where, although each individual might wish
the state to act in some way, there will be almost as many views
about what the government should do as there are different people.

We can rely on voluntary agreement to guide the action of the
state only so long as it is confined to spheres where agreement
exists. But not only when the state undertakes direct control
in fields where there is no such agreement is it bound to suppress
individual freedom. We can unfortunately not indefinitely ex-
tend the sphere of common action and still leave the individual
free in his own sphere. Once the communal sector, in which
the state controls all the means, exceeds a certain proportion of
the whole, the effects of its actions dominate the whole system.
Although the state controls directly the use of only a large part
of the available resources, the effects of its decisions on the
remaining part of the economic system become so great that
indirectly it controls almost everything. Where, as was, for
example, true in Germany as early as 1928, the central and
local authorities directly control the use of more than half the
national income (according to an official German estimate then,
53 per cent.) they control indirectly almost the whole economic
life of the nation. There is, then, scarcely an individual end
which is not dependent for its achievement on the action of
the state, and the “ social scale of values ” which guides the
state’s action must embrace practically all individual ends.

# * * * *

It is not difficult to see what must be the consequences when
democracy embarks upon a course of planning which in its
execution requires more agreement than in fact exists. The

46 THE ROAD TO SERFDOM

people may have agreed on adopting a system of directed economy
because they have been convinced that it will produce great
prosperity. In the discussions leading to the decision, the goal
of planning will have been described by some such term as
“ common welfare ” which only conceals the absence of real
agreement on the ends of planning. Agreement will in fact
exist only on the mechanism to be used. But it is a mechanism
which can be used only for a common end ; and the question
of the precise goal towards which all activity is to be directed
will arise as soon as the executive power has to translate the
demand for a single plan into a particular plan. Then it will
appear that the agreement on the desirability of planning is not
supported by agreement on the ends the plan is to serve. The
effect of the people agreeing that there must be central planning,
without agreeing on the ends, will be rather as if a group of
people were to commit themselves to take a journey together
without agreeing where they want to go : with the result that
they may all have to make a journey which most of them do
not want at all. That planning creates a situation in which it
is necessary for us to agree on a much larger number of topics
than we have been used to, and that in a planned system we
cannot confine collective action to the tasks on which we can
agree, but are forced to produce agreement on everything in
order that any action can be taken at all, is one of the features
which contribute more than most to determining the character
of a planned system.

It may have been the unanimously expressed will of the people
that parliament should prepare a comprehensive economic plan,
yet neither the people nor its representatives need therefore be
able to agree on any particular plan. The inability of demo-
cratic assemblies to carry out what seems to be a clear mandate
of the people will inevitably cause dissatisfaction with democratic
institutions. Parliaments come to be regarded as ineffective
“ talking shops ”, unable or incompetent to carry out the
tasks for which they have been chosen. The conviction grows
that if efficient planning is to be done, the direction must be
“ taken out of politics ” and placed in the hands of experts,
permanent officials or independent autonomous bodies.

The difficulty is well known to socialists. It will soon be half
a century since the Webbs began to complain of “ the increased
incapacity of the House of Commons to cope with its work ”. 1
More recently, Professor' Laski has elaborated the argument :

It is common ground that the present parliamentary machine is

quite unsuited to pass rapidly a great body of complicated legislation.

1 S. and B. Webb, Industrial Democracy, 1897, p. 800, footnote.

PLANNING AND DEMOCRACY 47

The National Government, indeed, has in substance admitted this
by implementing its economy and tariff measures not by detailed
debate in the House of Commons but by a wholesale system of
delegated legislation. A Labour Government would, I presume,
build upon the amplitude of this precedent. It would confine the
House of Commons to the two functions it can properly perform :
the ventilation of grievances and the discussion of general principles
of its measures. Its Bills would take the form of general formulae
conferring wide powers on the appropriate government departments ;
and those powers would be exercised by Order in Council which
could, if desired, be attacked in the House by means of a vote of
no confidence. The necessity and value of delegated legislation has
recently been strongly reaffirmed by the Donoughmore Committee ;
and its extension is inevitable if the process of socialisation is not
to be wrecked by the normal methods of obstruction which existing
parliamentary procedure sanctions.

And to make it quite clear that a socialist government must
not allow itself to be too much fettered by democratic procedure,
Professor Laski at the end of the same article raised the question
“ whether in a period of transition to Socialism, a Labour Govern-
ment can risk the overthrow of its measures as a result of the
next general election ” — and left it significantly unanswered . 1

* * # * #

It is important clearly to see the causes of this admitted ineffec-
tiveness of parliaments when it comes to a detailed administration
of the economic affairs of a nation. The fault is neither with
the individual representatives nor with parliamentary institutions
as such, but with the contradictions inherent in the task with
which they are charged. They are not asked to act where they
can agree, but to produce agreement on everything — the whole
direction of the resources of the nation. For such a task the
system of majority decision is, however, not suited. Majorities
will be found where it is a choice between limited alternatives ;
but it is a superstition to believe that there must be a majority
view on everything. There is no reason why there should be

1 H. J. Laski, “ Labour and the Constitution ”, The New Statesman and
Nation, No. 81 (New Series), Sept, ioth, 1932, p. 277. In a book ( Democracy
in Crisis, 1933, particularly p. 87) in which Professor Laski later elaborated
these ideas, his determination that parliamentary democracy must not be
allowed to form an obstacle to the realisation of socialism is even more plainly
expressed : not only would a socialist government “ take vast powers and
legislate under them by ordinance and decree” and ‘‘suspend the classic
formulae of normal opposition ”, but the “ continuance of parliamentary govern-
ment would depend on its [i.e. the Labour Government’s] possession of guar-
antees from the Conservative Party that its work of transformation would not
be disrupted by repeal in the event of its defeat at the polls ” I

As Professor Laski invokes the authority of the Donoughmore Committee
it may be worth recalling that Professor Laski was a member of that committee
and presumably one of the authors of its report.

48 THE ROAD TO SERFDOM

a majority in favour of any one of the different possible courses
of positive action if their number is legion. Every member of
the legislative assembly might prefer some particular plan for
the direction of economic activity to no plan, yet no one plan
may appear preferable to a majority to no plan at all.

Nor can a coherent plan be achieved by breaking it up into
parts and voting on particular issues. A democratic assembly
voting and amending a comprehensive economic plan clause by
clause, as it deliberates on an ordinary bill, makes nonsense.
An economic plan, to deserve the name, must have a unitary
conception. Even if parliament could, proceeding step by step,
agree on some scheme, it would certainly in the end satisfy nobody.
A complex whole where all the parts must be most carefully
adjusted to each other, cannot be achieved through a compromise
between conflicting views. To draw up an economic plan in this
fashion is even less possible than, for example, successfully to
plan a military campaign by democratic procedure. As in strategy
it would become inevitable to delegate the task to the experts.

Yet the difference is that, while the general who is put in
charge of a campaign is given a single end to which, for the
duration of the campaign, all the means under his control have
to be exclusively devoted, there can be no such single goal given
to the economic planner, and no similar limitation of the means
imposed upon him. The general has not got to balance different
independent aims against each other ; there is for him only one
supreme goal. But the ends of an economic plan, or of any
part of it, cannot be defined apart from the particular plan. It
is the essence of the economic problem that the making of an
economic plan involves the choice between conflicting or com-
peting ends — different needs of different people. But which
ends do so conflict, which will have to be sacrificed if we want
to achieve certain others, in short, which are the alternatives
between which we must choose, can only be known to those
who know all the facts ; and only they, the experts, are in a
position to decide which of the different ends are to be given
preference. It is inevitable that they should impose their scale
of preferences on the community for which they plan.

This is not always clearly recognised and delegation is usually
justified by the technical character of the task. But this does
not mean that only the technical detail is delegated, or even
that the inability of parliaments to understand the technical
detail is the root of the difficulty . 1 Alterations in the structure

1 It is instructive in this connection briefly to refer to the Government
document in which in recent years these problems have been discussed. As
long as thirteen years ago, that is before this country finally abandoned economic
liberalism, the process of delegating legislative powers had already been carried

PLANNING AND DEMOCRACY 49

of civil law are no less technical and no more difficult to appre-
ciate in all their implications ; yet nobody has yet seriously
suggested that legislation there should be delegated to a body
of experts. The fact is that in these fields legislation does not
go beyond general rules on which true majority agreement
can be achieved, while in the direction of economic activity
the interests to be reconciled are so divergent that no true agree-
ment is likely to be reached in a democratic assembly.

It should be recognised, however, that it is not the delegation
of law-making power as such, which is so objectionable. To
oppose delegation as such is to oppose a symptom instead of the
cause and, as it may be a necessary result of other causes, to
weaken the case. So long as the power that is delegated is
merely the power to make general rules, there may be very good
reasons why such rules should be laid down by local rather than
by the central authority. The objectionable feature is that
delegation is so often resorted to because the matter in hand
cannot be regulated by general rules but only by the exercise of
discretion in the decision of particular cases. In these instances
delegation means that some authority is given power to make
with the force of law what to all intents and purposes are arbitrary
decisions (usually described as “judging the case on its merits ”).

The delegation of particular technical tasks to separate bodies,
while a regular feature, is yet only the first step in the process
whereby a democracy which embarks on planning progressively
relinquishes its powers. The expedient of delegation cannot
really remove the causes which make all the advocates of compre-
hensive planning so impatient with the impotence of democracy.
The delegation of particular powers to separate agencies creates

to a point where it was felt necessary to appoint a committee to investigate
“ what safeguards are desirable or necessary to secure the sovereignty of Law
In its report the “ Donoughmore Committee ” ( Report of the [Lord Chancellor’s]
Committee on Ministers’ Powers, Cmd. 4060, 1932) showed that even at that
date Parliament had resorted “ to the practice of wholesale and indiscriminate
delegation ” but regarded this (it was before we had really glanced into the
totalitarian abyss I) as an inevitably and relatively innocuous development.
And it is probably true that delegation as such need not be a danger to freedom.
The interesting point is why delegation had become necessary on such a scale.
First place among the causes enumerated in the report is given to the fact that
“ Parliament nowadays passes so many laws every year ” and that “ much of
the detail is so technical as to be unsuitable for Parliamentary discussion ”,
But if this were all there would be no reason why the detail should not be
worked out before rather than after Parliament passes a law. What is probably
in many cases a much more important reason why, “ if Parliament were not
willing to delegate law-making power, Parliament would be unable to pass
the kind and quantity of legislation which public opinion requires ” is
innocently revealed in the little sentence that “ many of the laws affect
people’s lives so closely that elasticity is essential ” 1 What does this mean
if not conferment of arbitrary power, power limited by no fixed principles and
which in the opinion of Parliament cannot be limited by definite and un-
ambiguous rules ?

THE ROAD TO SERFDOM

5 °

a new obstacle to the achievement of a single co-ordinated plan.
Even if, by this expedient, a democracy should succeed in plan-
ning every sector of economic activity, it would still have to face
the problem of integrating these separate plans into a unitary
whole. Many separate plans do not make a planned whole — in
fact, as the planners ought to be the first to admit — they may be
worse than no plan. But the democratic legislature will long
hesitate to relinquish the decisions on really vital issues, and so
long as it does so it makes it impossible for anyone else to provide
the comprehensive plan. Yet agreement that planning is neces-
sary, together with the inability of democratic assemblies to
produce a plan, will evoke stronger and stronger demands that
the government or some single individual should be given powers
to act on their own responsibility. The belief is becoming more
and more widespread that, if things are to get done, the responsible
authorities must be freed from the fetters of democratic procedure.

The cry for an economic dictator is a characteristic stage in
the movement towards planning, not unfamiliar in this country.
It is now several years since one of the most acute of foreign
students of England, the late Elie Halevy, suggested that “ if
you take a composite photograph of Lord Eustace Percy, Sir
Oswald Mosley, and Sir Stafford Cripps, I think you would
find this common feature — you would find them all agreeing to
say : ‘ We are living in economic chaos and we cannot get out
of it except under some kind of dictatorial leadership 1 The
number of influential public men whose inclusion would not
materially alter the features of the “ composite photograph ”
has since grown considerably.

In Germany, even before Hitler came into power, the move-
ment had already progressed much further. It is important to
remember that for some time before 1933 Germany had reached a
stage in which it had, in effect, had to be governed dictatorially.
Nobody could then doubt that for the time being democracy
had broken down, and that sincere democrats like Briining were
no more able to govern democratically than Schleicher or von
Papen. Hitler did not have to destroy democracy ; he merely
took advantage of the decay of democracy and at the critical
moment obtained the support of many to whom, though they
detested Hitler, he yet seemed the only man strong enough to
get things done.

• * # # *

The argument by which the planners usually try to reconcile
us with this development is that so long as democracy retains

1 “ Socialism and the Problems of Democratic Parliamentarism ”, Inter-:
national Affairs, vol. XIII, p. 501.

PLANNING AND DEMOCRACY 5 1

ultimate control, the essentials of democracy are not affected.
Thus Karl Mannheim writes :

The only [«’c] way in which a planned society differs from that
of the nineteenth century is that more and more spheres of social
life, and ultimately each and all of them, are subjected to state control.
But if a few controls can be held in check by parliamentary
sovereignty, so can many. ... in a democratic state sovereignty
can be boundlessly strengthened by plenary powers without
renouncing democratic control . 1

This belief overlooks a vital distinction. Parliament can, of
course, control the execution of tasks where it can give definite
directions, where it has first agreed on the aim and merely
delegates the working out of the detail. The situation is entirely
different when the reason for the delegation is that there is no
real agreement on the ends, when the body charged with the
planning has to choose between ends of whose conflict parliament
is not even aware, and when the most that can be done is to
present to it a plan which has to be accepted or rejected as a
whole. There may and probably will be criticism ; but as no
majority can agree on an alternative plan, and the parts objected
to can almost always be represented as essential parts of the
whole, it will remain quite ineffective. Parliamentary dis-
cussion may be retained as a useful safety-valve, and even
more as a convenient medium through which the official answers
to complaints are disseminated. It may even prevent some
flagrant abuses and successfully insist on particular shortcomings
being remedied. But it cannot direct. It will at best be reduced
to choosing the persons who are to have practically absolute
power. The whole system will tend towards that plebiscitarian
dictatorship in which the head of the government is from time
to time confirmed in his position by popular vote, but where he
has all the powers at his command to make certain that the
vote will go in the direction he desires.

It is the price of democracy that the possibilities of conscious
control are restricted to the fields where true agreement exists,
and that in some fields things must be left to chance. But in
a society which for its functioning depends on central planning,
this control cannot be made dependent on a majority being able
to agree ; it will often be necessary that the will of a small minority
be imposed upon the people, because this minority will be the
largest group able to agree among themselves on the question
at issue. Democratic government has worked successfully where,
and so long as, the functions of government were, by a widely
accepted creed, restricted to fields where agreement among a

1 K. Mannheim, Man and Society in an Age of Reconstruction, 1940, p. 340.

52 THE ROAD TO SERFDOM

majority could be achieved by free discussion ; and it is the
great merit of the liberal creed that it reduced the range of sub-
jects on which agreement was necessary to one on which it was
likely to exist in a society of free men. It is now often said
that democracy will not tolerate “ capitalism If “ capitalism ”
means here a competitive system based on free disposal over
private property, it is far more important to realise that only
within this system is democracy possible. When it becomes
dominated by a collectivist creed, democracy will inevitably
destroy itself.

# # * * #

We have no intention, however, of making a fetish of democracy.
It may well be true that our generation talks and thinks too much
of democracy and too little of the values which it serves. It
cannot be said of democracy, as Lord Acton truly said of liberty,
that it “ is not a means to a higher political end. It is itself
the highest political end. It is not for the sake of a good public
administration that it is required, but for the security in the
pursuit of the highest objects of civil society, and of private life.”
Democracy is essentially a means, a utilitarian device for safe-
guarding internal peace and individual freedom. As such it is
by no means infallible or certain. Nor must we forget that
there has often been much more cultural and spiritual freedom
under an autocratic rule than under some democracies — and it
is at least conceivable that under the government of a very homo-
geneous and doctrinaire majority democratic government might
be as oppressive as the worst dictatorship. Our point, however,
is not that dictatorship must inevitably extirpate freedom, but
rather that planning leads to dictatorship because dictatorship
is the most effective instrument of coercion and the enforcement
of ideals, and as such essential if central planning on a large
scale is to be possible. The clash between planning and demo-
cracy arises simply from the fact that the latter is an obstacle
to the suppression of freedom which the direction of economic
activity requires. But in so far as democracy ceases to be a
guarantee of individual freedom, it may well persist in some
form under a totalitarian regime. A true “ dictatorship of the
proletariat ”, even if democratic in form, if it undertook centrally
to direct the economic system, would probably destroy personal
freedom as completely as any autocracy has ever done.

The fashionable concentration on democracy as the main value
threatened is not without danger. It is largely responsible
for the misleading and unfounded belief that so long as the
ultimate source of power is the will of the majority, the power
cannot be arbitrary. The false assurance which many people

PLANNING AND DEMOCRACY 53

derive from this belief is an important cause of the general
unawareness of the dangers which we face. There is no justifica-
tion for the belief that so long as power is conferred by demo-
cratic procedure, it cannot be arbitrary ; the contrast suggested
by this statement is altogether false : it is not the source but the
limitation of power which prevents it from being arbitrary.
Democratic control may prevent power from becoming arbitrary,
but it does not do so by its mere existence. If democracy resolves
on a task which necessarily involves the use of power which
cannot be guided by fixed rules, it must become arbitrary power.

CHAPTER VI

PLANNING AND THE RULE OF LAW

Recent studies in the sociology of law once more confirm
that the fundamental principle of formal law by which every
case must be judged according to general rational precepts,
which have as few exceptions as possible and are based on
logical subsumptions, obtains only for the liberal competitive
phase of capitalism.

K. Mannheim.

NOTHING distinguishes more clearly conditions in a free
country from those in a country under arbitrary government
than the observance in the former of the great principles known
as the Rule of Law. Stripped of all technicalities this means
that government in all its actions is bound by rules fixed and
announced beforehand — rules which make it possible to foresee
with fair certainty how the authority will use its coercive powers
in given circumstances, and to plan one’s individual affairs on
the basis of this knowledge . 1 Though this ideal can never be
perfectly achieved, since legislators as well as those to whom the
administration of the law is entrusted are fallible men, the essential
point, that the discretion left to the executive organs wielding
coercive power should be reduced as much as possible, is clear
enough. While every law restricts individual freedom to some
extent by altering the means which people may use in the pursuit
of their aims, under the Rule of Law the government is pre-
vented from stultifying individual efforts by ad hoc action.
Within the known rules of the game the individual is free
to pursue his personal ends and desires, certain that the powers
of government will not be used deliberately to frustrate his
efforts.

The distinction we have drawn before between the creation of
a permanent framework of laws within which the productive
activity is guided by individual decisions, and the direction of

1 According to the classical exposition by A. V. Dicey in The Law of the
Constitution (8th ed., p. 198) the rule of law “ means, in the first place, the
absolute supremacy or predominance of regular law as opposed to the influence
of arbitrary power, and excludes the existence of arbitrariness, of prerogative,
or even of wide discretionary authority on the part of government ”, Largely
as a result of Dicey’s work the term has, however, in England acquired a
narrower technical meaning which does not concern us here. The wider and
older meaning of the concept of the rule or reign of law, which in England had
become an established tradition which was more taken for granted than dis-
cussed, has been most fully elaborated, just because it raised what were there
new problems, in the early nineteenth-century discussions in Germany about
the nature of the Rechtsstaat.

54

PLANNING AND THE RULE OF LAW 55

economic activity by a central authority, is thus really a particular
case of the more general distinction between the Rule of Law
and arbitrary government. Under the first the government
confines itself to fixing rules determining the conditions under
which the available resources may be used, leaving to the indi-
viduals the decision for what ends they are to be used. Under
the second the government directs the use of the means of produc-
tion to particular ends. The first type of rules can be made in
advance, in the shape of formal rules which do not aim at the wants
and needs of particular people. They are intended to be merely
instrumental in the pursuit of people’s various individual ends.
And they are, or ought to be, intended for such long periods that
it is impossible to know whether they will assist particular people
more than others. They could almost be described as a kind of
instrument of production, helping people to predict the behaviour
of those with whom they must collaborate, rather than as efforts
towards the satisfaction of particular needs.

Economic planning of the collectivist kind necessarily involves
the very opposite of this. The planning authority cannot confine
itself to providing opportunities for unknown people to make
whatever use of them they like. It cannot tie itself down in
advance to general and formal rules which prevent arbitrariness.
It must provide for the actual needs of people as they arise
and then choose deliberately between them. It must constantly
decide questions which cannot be answered by formal principles
only, and in making these decisions it must set up distinctions
of merit between the needs of different people. When the
government has to decide how many pigs are to be reared or
how many buses are to be run, which coal mines are to operate,
or at what prices boots are to be sold, these decisions cannot
be deduced from formal principles, or settled for long periods
in advance. They depend inevitably on the circumstances of
the moment, and in making such decisions it will always be
necessary to balance one against the other the interests of various
persons and groups. In the end somebody’s views will have to
decide whose interests are more important ; and these views
must become part of the law of the land, a new distinction of
rank which the coercive apparatus of government imposes upon
the people.

# * * • •

The distinction we have just used between formal law or
justice and substantive rules is very important and at the same
time most difficult to draw precisely in practice. Yet the general
principle involved is simple enough. The difference between the
two kinds of rules is the same as that between laying down a Rule

56 THE ROAD TO SERFDOM

of the Road, as in the Highway Code, and ordering people where
to go ; or, better still, between providing signposts and com-
manding people which road to take. The formal rules tell people
in advance what action the state will take in certain types of
situation, defined in general terms, without reference to time and
place or particular people. They refer to typical situations into
which anyone may get and in which the existence of such rules
will be useful for a great variety of individual purposes. The
knowledge that in such situations the state will act in a definite
way, or require people to behave in a certain manner, is pro-
vided as a means for people to use in making their own plans.
Formal rules are thus merely instrumental in the sense that they
are expected to be useful to yet unknown people, for purposes
for which these people will decide to use them, and in circum-
stances which cannot be foreseen in detail. In fact, that we do
not know their concrete effect, that we do not know what particular
ends these rules will further, or which particular people they will
assist, that they are merely given the form most likely on the
whole to benefit all the people affected by them, is the most
important criterion of formal rules in the sense in which we here
use this term. They do not involve a choice between particular
ends or particular people, because we just cannot know before-
hand by whom and in what way they will be used.

In our age, with its passion for conscious control of everything,
it may appear paradoxical to claim as a virtue that under one
system we shall know less about the particular effect of the
measures the state takes than would be true under most other
systems and that a method of social control should be deemed
superior because of our ignorance of its precise results. Yet this
consideration is in fact the rationale of the great liberal principle
of the Rule of Law. And the apparent paradox dissolves rapidly
when we follow the argument a little further.

# * * # #

This argument is two-fold ; the first is economic and can here
only briefly be stated. The state should confine itself to establish-
ing rules applying to general types of situations, and should allow
the individuals freedom in everything which depends on the
circumstances of time and place, because only the individuals
concerned in each instance can fully know these circumstances
and adapt their actions to them. If the individuals are to be able
to use their knowledge effectively in making plans, they must
be able to predict actions of the state which may affect these plans.
But if the actions of the state are to be predictable, they must
be determined by rules fixed independently of the concrete circum-
stances which can neither be foreseen nor taken into account

PLANNING AND THE RULE OF LAW

57

beforehand : and the particular effects of such actions will be
unpredictable. If, on the other hand, the state were to direct
the individual’s actions so as to achieve particular ends, its action
would have to be decided on the basis of the full circumstances
of the moment and would therefore be unpredictable. Hence
the familiar fact that the more the state “ plans ” the more
difficult planning becomes for the individual.

The second, moral or political, argument is even more directly
relevant to the point under discussion. If the state is precisely
to foresee the incidence of its actions, it means that it can leave
those affected no choice. Wherever the state can exacdy foresee
the effects on particular people of alternative courses of action,
it is also the state which chooses between the different ends. If
we want to create new opportunities open to all, to offer chances
of which people can make what use they like, the precise results
cannot be foreseen. General rules, genuine laws as distinguished
from specific orders, must therefore be intended to operate in
circumstances which cannot be foreseen in detail, and, therefore,
their effect on particular ends or particular people cannot be known
beforehand. It is in this sense alone that it is at all possible for
the legislator to be impartial. To be impartial means to have no
answer to certain questions — to the kind of questions which, if
we have to decide them, we decide by tossing a coin. In a world
where everything was precisely foreseen, the state could hardly
doanything and remain impartial. But where the precise effects
of government policy on particular people are known, where
tne government aims directly at such particular effects, it cannot
help knowing these effects, and therefore it cannot be impartial.
If must, of necessity, take sides, impose its valuations upon people
and, instead of assisting them in the advancement of their own
ends, choose the ends for them. As soon as the particular effects
are foreseen at the time a law is made, it ceases to be a mere
instrument to be used by the people and becomes instead an
instrument used by the law-giver upon the people and for his
ends. The state ceases to be a piece of utilitarian machinery
intended to help individuals in the fullest development of their
individual personality and becomes a “ moral ” institution — where
“ moral ” is not used in contrast to immoral, but describes an
institution which imposes on its members its views on all moral
questions, whether these views be moral or highly immoral. In
this sense the Nazi or any other collectivist state is “ moral ”,
while the liberal state is not.

Perhaps it will be said that all this raises no serious problem
because in the kind of questions which the economic planner
would have to decide he need not and should not be guided by
his individual prejudices, but could rely on the general conviction

58 the road to serfdom

of what is fair and reasonable. This contention usually receives
support from those who have experience of planning in a particular
industry and who find that there is no insuperable difficulty about
arriving at a decision which all those immediately interested will
accept as fair. The reason why this experience proves nothing
is, of course, the selection of the “ interests ” concerned when
planning is confined to a particular industry. Those most
immediately interested in a particular issue are not necessarily
the best judges of the interests of society as a whole. To take
only the most characteristic case : when capital and labour in
an industry agree on some policy of restriction and thus exploit
the consumers, there is usually no difficulty about the division
of the spoils in proportion to former earnings or on some similar
principle. The loss which is divided between thousands or
millions is usually either simply disregarded or quite inadequately
considered. If we want to test the usefulness of the principle
of “ fairness ” in deciding the kind of issues which arise in
economic planning, we must apply it to some question where
the gains and the losses are seen equally clearly. In such instances
it is readily recognised that no general principle such as fairness
can provide an answer. When we have to choose between
higher wages for nurses or doctors and more extensive services
for the sick, more milk for children and better wages for agri-
cultural workers, or between employment for the unemployed
or better wages for those already employed, nothing short of
a complete system of values in which every want of every
person or group has a definite place is necessary to provide an
answer.

In fact, as planning becomes more and more extensive, it
becomes regularly necessary to qualify legal provisions increasingly
by reference to what is “ fair ” or “ reasonable ” ; this means
that it becomes necessary to leave the decision of the concrete
case more and more to the discretion of the judge or authority
in question. One could write a history of the decline of the
Rule of Law, the disappearance of the Rechtsstaat, in terms
of the progressive introduction of these vague formulae into
legislation and jurisdiction, and of the increasing arbitrariness
and uncertainty of, and the consequent disrespect for, the law
and the judicature, which in these circumstances could not but
become an instrument of policy. It is important to point out
once more in this connection that this process of the decline of
the Rule of Law had been going on steadily in Germany for some
time before Hitler came into power, and that a policy well
advanced towards totalitarian planning had already done a great
deal of the work which Hitler completed.

There can be no doubt that planning necessarily involves

PLANNING AND THE RULE OF LAW

59

deliberate discrimination between particular needs of different
people, and allowing one man to do what another must be pre-
vented from doing. It must lay down by a legal rule how well
off particular people shall be and what different people are to be
allowed to have and do. It means in effect a return to the rule
of status, a reversal of the “ movement of progressive societies ”
which, in the famous phrase of Sir Henry Maine, “ has hitherto
been a movement from status to contract ”. Indeed, the Rule
of Law, more than the rule of contract, should probably be
regarded as the true opposite of the rule of status. It is the
Rule of Law, in the sense of the rule of formal law, the absence
of legal privileges of particular people designated by authority,
which safeguards that equality before the law which is the
opposite of arbitrary government.

* * * # #

A necessary, and only apparently paradoxical, result of this is
that formal equality before the law is in conflict, and in fact incom-
patible, with any activity of the government deliberately aiming
at material or substantive equality of different people, and that any
policy directly aiming at a substantive ideal of distributive justice
must lead to the destruction of the Rule of Law. To produce
the same result for different people it is necessary to treat them
differently. To give different people the same objective oppor-
tunities is not to give them the same subjective chance. It cannot
be denied that the Rule of Law produces economic inequality —
all that can be claimed for it is that this inequality is not designed
to affect particular people in a particular way. It is very signi-
ficant and characteristic that socialists (and Nazis) have always
protested against “ merely ” formal justice, that they have always
objected to a law which had no views on how well off particular
people 'ought to be , 1 and that they have always demanded
a “ socialisation of the law ”, attacked the independence of
judges, and at the same time given their support to all such
movements as the Freirechtsschule which undermined the Rule
of Law.

It may even be said that for the Rule of Law to be effective it
is more important that there should be a rule applied always
without exceptions, than what this rule is. Often the content of
the rule is indeed of minor importance, provided the same rule is
universally enforced. To revert to a former example : it does

1 It is therefore not altogether false when the legal theorist of National-
Socialism, Carl Schmitt, opposes to the liberal Rechtsstaat (i.e. the Rule of
Law) the national-socialist ideal of the gerechte Staat (the just state) — only
that the sort of justice which is opposed to formal justice necessarily implies
discrimination between persons.

60 THE ROAD TO SERFDOM

not matter whether we all drive on the left- or on the right-hand
side of the road so long as we all do the same. The important
thing is that the rule enables us to predict other people’s behaviour
correctly, and this requires that it should apply to all cases — even
if in a particular instance we feel it to be unjust.

The conflict between formal justice and formal equality before
the law on the one hand, and the attempts to realise various ideals
of substantive justice and equality on the other, also accounts for
the widespread confusion about the concept of “ privilege ” and
its consequent abuse. To mention only the most important
instance of this abuse — the application of the term privilege to
property as such. It would indeed be privilege if, for example,
as has sometimes been the case in the past, landed property were
reserved to members of the nobility. And it is privilege if, as is
true in our time, the right to produce or sell particular things is
reserved to particular people designated by authority. But to
call private property as such, which all can acquire under the same
rules, a privilege, because only some succeed in acquiring it, is
depriving the word privilege of its meaning.

The unpredictability of the particular effects, which is the dis-
tinguishing characteristic of the formal laws of a liberal system,
is also important because it helps us to clear up another confusion
about the nature of this system : the belief that its characteristic
attitude is inaction of the state. The question whether the state
should or should not “ act ” or “ interfere ” poses an altogether
false alternative, and the term laissez-faire is a highly ambiguous
and misleading description of the principles on which a liberal
policy is based. Of course, every state must act and every aqtion
of the state interferes with something or other. But that is not
the point. The important question is whether the individual
can foresee the action of the state and make use of this knowledge
as a datum in forming his own plans, with the result that the
state cannot control the use made of its machinery, and that the
individual knows precisely how far he will be, protected against
interference from others, or whether the state is in a position to
frustrate individual efforts. The state controlling weights and
measures (or preventing fraud and deception in any other way)
is certainly acting, while the state permitting the use of violence,
for example, by strike pickets, is inactive. Yet it is in the first
case that the state observes liberal principles and in the second
that it does not. Similarly with respect to most of the general
and permanent rules which the state may establish with regard
to production, such as building regulations or factory laws : these
may be wise or unwise in the particular instance, but they do not
conflict with liberal principles so long as they are intended to be
permanent and are not used to favour or harm particular people.

PLANNING AND THE RULE OF LAW 6 1

It is true that in these instances there will, apart from the long-
run effects which cannot be predicted, also be short-run effects
on particular people which may be clearly known. But with this
kind of laws the short-run effects are in general not (or at least
ought not to be) the guiding consideration. As these immediate
and predictable effects become more important" compared with
the long-run effects, we approach the border-line where the
distinction, however, clear in principle, becomes blurred in
practice.

* # # # *

The Rule of Law was consciously evolved only during the
liberal age and is one of its greatest achievements, not only as a
safeguard but as the legal embodiment of freedom. As Immanuel
Kant put it (and Voltaire expressed it before him in very much
the same terms), “ Man is free if he needs to obey no person
but solely the laws As a vague ideal it has, however, existed
at least since Roman times, and during the last few centuries
it has never been as seriously threatened as it is to-day. The
idea that there is no limit to the powers of the legislator is in part
a result of popular sovereignty and democratic government. It
has been strengthened by the belief that so long as all actions of
the state are duly authorised by legislation, the Rule of Law will
be preserved. But this is completely to misconceive the meaning
of the Rule of Law. This rule has little to do with the question
whether all actions of government are legal in the juridical sense.
They may well be and yet not conform to the Rule of Law.
The fact that somebody has full legal authority to act in the way
he does gives no answer to the question whether the law gives
him power to act arbitrarily or whether the law prescribes
unequivocally how he has to act. It may well be that Hitler has
obtained his unlimited powers in a strictly constitutional manner
and that whatever he does is therefore legal in the juridical sense.
But who would suggest for that reason that the Rule of Law still
prevails in Germany ?

To say that in a planned society the Rule of Law cannot hold
is, therefore, not to say that the actions of the government will
not be legal or that such a society will necessarily be lawless. It
means only that the use of the government’s coercive powers will
no longer be limited and determined by pre-established rules.
The law can, and to make a central direction of economic activity
possible must, legalise what to all intents and purposes remains
arbitrary action. If the law says that such a Board or Authority
may do what it pleases, anything that Board or Authority does is
legal — but its actions are certainly not subject to the Rule of Law.
By giving the government unlimited powers the most arbitrary

THE ROAD TO SERFDOM

62

rule can be made legal : and in this way a democracy may set
up the most complete despotism imaginable . 1

If, however, the law is to enable authorities to direct economic
life, it must give them powers to make and enforce decisions in
circumstances which cannot be foreseen and on principles which
cannot be stated in generic form. The consequence is that as
planning extends, the delegation of legislative powers to divers
Boards and Authorities becomes increasingly common. When
before the last war, in a case to which the late Lord Hewart has
recently drawn attention, Mr. Justice Darling said “ that Parlia-
ment had enacted only last year that the Board of Agriculture in
acting as they did should be no more impeachable than Parliament
itself ”, this was still a rare thing. It has since become an almost
daily occurrence. Constantly the broadest powers are conferred
on new authorities which, without being bound by fixed rules,
have almost unlimited discretion in regulating this or that activity
of the people.

The Rule of Law thus implies limits to the scope of legislation :
it restricts it to the kind of general rules known as formal law,
and excludes legislation either directly aimed at particular people,
or at enabling anybody to use the coercive power of the state for
the purpose of such discrimination. It means, not that everything
is regulated by law, but, on the contrary, that the coercive power
of the state can be used only in cases defined in advance by the
law and in such a way that it can be foreseen how it will be used.
A particular enactment can thus infringe the Rule of Law.
Anyone ready to deny this would have to contend that whether
the Rule of Law prevails to-day in Germany, Italy, or Russia,
depends on whether the dictators have obtained their absolute
power by constitutional means . 2

* # # # #

1 The conflict is thus not, as it has often been misconceived in nineteenth-
century discussions, one between liberty and law. As John Locke had already
made clear, there can be no liberty without law. The conflict is between
different kinds of law, law so different that it should hardly be called by the
same name : one is the law of the Rule of Law, general principles laid down
beforehand, the “ rules of the game ” which enable individuals to foresee how
the coercive apparatus of the state will be used, or what he and his fellow-
citizens will be allowed to do, or made to do, in stated circumstances. The
other kind of law gives in effect the authority power to do what it thinks fit
to do. Thus the Rule of Law could clearly not be preserved in a democracy
that undertook to decide every conflict of interests not according to rules
previously laid down, but “ on its merits ”.

s Another illustration of an infringement of the Rule of Law by legislation
is the case of the bill of attainder, familiar in the history of this country. The
form which the Rule of Law takes in criminal law is usually expressed by the
Latin tag nulla poena sine lege — no punishment without a law expressly pre-
scribing it. The essence of this rule is that the law must have existed as a
general rule before the individual case arose to which it is to be applied.
Nobody would argue that, when in a famous case in Henry VIII’s reign Parlia-

PLANNING AND THE RULE OF LAW 63

Whether, as in some countries, the main applications of the
Rule of Law are laid down in a Bill of Rights or a Constitutional
Code, or whether the principle is merely a firmly established
tradition, matters comparatively little. But it will readily be seen
that whatever form it takes, any such recognised limitations of
the powers of legislation imply the recognition of the inalienable
right of the individual, inviolable rights of man.

It is pathetic, but characteristic . of the muddle into which
many of our intellectuals have been led by the conflicting ideals
in 'which they believe, that a leading advocate of the most com-
prehensive central planning like Mr. H. G. Wells should at the
same time write an ardent defence of the Rights of Man. The
individual rights which Mr. Wells hopes to preserve would
inevitably obstruct the planning which he desires. To some
extent he seems to realise the dilemma, and we find therefore the
provisions of his proposed “ Declaration of the Rights of Man ”
so hedged about with qualifications that they lose all significance.
While, for instance, his Declaration proclaims that every man
“ shall have the right to buy and sell without any discriminatory
restrictions anything which may be lawfully bought and sold ”,
which is admirable, he immediately proceeds to make the whole
provision nugatory by adding that it applies only to buying and
selling “ in such quantities and with such reservations as are
compatible with the common welfare ”. But since, of course,
all restrictions ever imposed upon buying or selling anything are
supposed to be necessary in the interest of the “ common welfare ”,
there is really no restriction which this clause effectively prevents,
and no right of the individual that is safeguarded by it. Or, to
take another basic clause, the Declaration states that every man
“ may engage in any lawful occupation ” and that “ he is entitled
to paid employment and to a free choice whenever there is any
variety of employment open to him ”. It is not stated, however,
who is to decide whether a particular employment is “ open ”
to a particular person, and the added provision that “ he may
suggest employment for himself and have his claim publicly

ment resolved with respect to the Bishop of Rochester’s cook “ that the said
Richard Rose shall be boiled to death without having the advantage of his
clergy ”, this act was performed under the Rule of Law. But while the Rule
of Law had become an essential part of criminal procedure in all liberal
countries, it cannot be preserved in totalitarian regimes. There, as E. B.
Ashton has well expressed it, the liberal maxim is replaced by the principles
nullum crimen sine poena — no “ crime ” must remain without punishment,
whether the law explicitly provides for it or not. “ The rights of the state do
not end with punishing law breakers. The community is entitled to whatever
may seem necessary to the protection of its interests — of which observance of
the law, as it stands, is only one of the more elementary requirements ”
(E. B. Ashton, The Fascist, His State and Mind, 1937, p. 119). What is an
infringement of “ the interests of the community ” is, of course, decided by
the authorities.

64 the road to serfdom

considered, accepted or dismissed ” shows that Mr. Wells is
thinking in terms of an authority which decides whether a man
is “ entitled ” to a particular position — which certainly means
the opposite of free choice of occupation. And how in a planned
world “ freedom of travel and migration ” is to be secured when
not only the means of communication and currencies are con-
trolled, but also the location of industries planned, or how the
freedom of the press is to be safeguarded when the supply of
paper and all the channels of distribution are controlled by the
planning authority, are questions to which Mr. Wells provides
as little answer as any other planner.

In this respect much more consistency is shown by the more
numerous reformers who, ever since the beginning of the socialist
movement, have attacked the “ metaphysical ” idea of individual
rights and insisted that in a rationally ordered world there will
be no individual rights but only individual duties. This, indeed,
has become the much more common attitude of our so-called
progressives, and few things are more certain to expose one to
the reproach of being a reactionary than if one protests against
a measure on the grounds that it is a violation of the rights of
the individual. Even a liberal paper like The Economist was a
few years ago holding up to us the example of the French, of
all people, who had learnt the lesson

that democratic government no less than dictatorship must always
[tic] have plenary powers in posse, without sacrificing their demo-
cratic and representative character. There is no restrictive
penumbra of individual rights that can never be touched by govern-
ment in administrative matters whatever the circumstances. There
is no limit to the power of ruling which can and should be taken
by a government freely chosen by the people and can be fully and
openly criticised by an opposition.

This may be inevitable in wartime when, of course, even free and
open criticism is necessarily restricted. But the “ always ” in
the statement quoted does not suggest that The Economist regards
it as a regrettable wartime necessity. Yet as a permanent institu-
tion this view is certainly incompatible with the preservation of
the Rule of Law, and it leads straight to the totalitarian state.
It is, however, the view which all those who want the government
to direct economic life must hold.

How even a formal recognition of individual rights, or of the
equal rights of minorities, loses all significance in a state which
embarks on a complete control of economic life, has been amply
demonstrated by the experience of the various Central European
countries. It has been shown there that it is possible to pursue
a policy of ruthless discrimination against national minorities by
the use of recognised instruments of economic policy, without

PLANNING AND THE RULE OF LAW 65

ever infringing the letter of the statutory protection of minority
rights. This oppression by means of economic policy was greatly
facilitated by the fact that particular industries or activities were
largely in the hands of a national minority so that many a measure
aimed ostensibly against an industry or class was in fact aimed at
a national minority. But the almost boundless possibilities for
a policy of discrimination and oppression provided by such
apparently innocuous principles as “ government .control of
the development of industries ” have been amply demonstrated
to all those desirous of seeing how the political consequences of
planning appear in practice.

CHAPTER VII

ECONOMIC CONTROL AND TOTALITARIANISM

The control of the production of wealth is the control of
human life itself.

Hilaire Belloc.

MOST planners who have seriously considered the practical
aspects of their task have little doubt that a directed economy
must be run on more or less dictatorial lines. That the complex
system of interrelated activities, if it is to be consciously directed
at all, must be directed by a single staff of experts, and that
ultimate responsibility and power must rest in the hands of a
commander-in-chief, whose actions must not be fettered by
democratic procedure, is too obvious a consequence of under-
lying ideas of central planning not to command fairly general
assent. The consolation our planners offer us is that this authori-
tarian direction will apply “ only ” to economic matters. One
of the most prominent American planners, Mr. Stuart Chase,
assures us, for instance, that in a planned society “ political
democracy can remain if it confines itself to all but economic
matter ”. Such assurances are usually accompanied by the sug-
gestion that by giving up freedom in what are, or ought to be,
the less important aspects of our lives, we shall obtain greater
freedom in the pursuit of higher values. On this ground people
who abhor the idea of a political dictatorship often clamour for
a dictator in the economic field.

The arguments used appeal to our best instincts and often
attract the finest minds. If planning really did free us from the
less important cares and so made it easier to render our existence
one of plain living and high thinking, who would wish to belittle
such an ideal ? If our economic activities really concerned only
the inferior or even more sordid sides of life, of course we ought
to endeavour by all means to find a way to relieve ourselves
from the excessive care for material ends, and, leaving them to
be cared for by some piece of utilitarian machinery, set our minds
free for the higher things of life.

Unfortunately the assurance people derive from this belief
that the power which is exercised over economic life is a power
over matters of secondary importance only, and which makes
them take lightly the threat to the freedom of our economic
pursuits, is altogether unwarranted. It is largely a consequence
of the erroneous belief that there are purely economic ends
separate from the other ends of life. Yet, apart from the pathg

66

ECONOMIC CONTROL AND TOTALITARIANISM 67

logical case of the miser, there is no such thing. The ultimate
ends of the activities of reasonable beings are never economic.
Strictly speaking there is no “ economic motive ” but only
economic factors conditioning our striving for other ends. What
in ordinary language is misleadingly called the “ economic
motive ” means merely the desire for general opportunity, the
desire for power to achieve unspecified ends . 1 If we strive for
money it is because it offers us the widest choice in enjoying the
fruits of our efforts. Because in modern society it is through the
limitation of our money incomes that we are made to feel the
restrictions which our relative poverty still imposes upon us,
many have come to hate money as the symbol of these restrictions.
But this is to mistake for the cause the medium through which
a force makes itself felt. It would be much truer to say that
money is one of the greatest instruments of freedom ever invented
by man. It is money which in existing society opens an astound-
ing range of choice to the poor man, a range greater than that
which not many generations ago was open to the wealthy. We
shall better understand the significance of this service of money
if we consider what it would really mean if, as so many socialists
characteristically propose, the “ pecuniary motive ” were largely
displaced by “ non-economic incentives ”. If all rewards, instead
of being offered in money, were offered in the form of public
distinctions or privileges, positions of power over other men,
or better housing or better food, opportunities for travel or
education, this would merely mean that the recipient would no
longer be allowed to choose, and that, whoever fixed the reward,
determined not only its size but also the particular form in which
it should be enjoyed.

* * * * #

Once we realise that there is no separate economic motive
and that an economic gain or economic loss is merely a gain
or a loss where it is still in our power to decide which of our
needs or desires shall be affected, it is also easier to see the
important kernel of truth in the general belief that economic
matters affect only the less important ends of life, and to under-
stand the contempt in which “ merely ” economic considerations
are often held. In a sense this is quite justified in a market
economy — but only in such a free economy. So long as we
can freely dispose over our income and all our possessions,
economic loss will always deprive us only of what we regard as
the least important of the desires we were able to satisfy. A
“ merely ” economic loss is thus one whose effect we can still
make fall on our less important needs, while when we say that
1 Cf. L. Robbins, The Economic Causes of War, 1939, Appendix.

THE ROAD TO SERFDOM

68

the value of something we have lost is much greater than its '
economic value, or that it cannot even be estimated in economic
terms, this means that we must bear the loss where it falls. And
similarly with an economic gain. Economic changes, in other
words, usually affect only the fringe, the “ margin ”, of our
needs. There are many things which are more important than
anything which economic gains or losses are likely to affect,
which for us stand high above the amenities and even above
many of the necessities of life which are affected by the economic
ups and downs. Compared with them, the “ filthy lucre ”, the
question whether we are economically somewhat worse or better
off, seems of little importance. This makes many people believe
that anything which, like economic planning, affects only our
economic interests, cannot seriously interfere with the more
basic values of life.

This, however, is an erroneous conclusion. Economic values
are less important to us than many things precisely because in
economic matters we are free to decide what to us is more, and
what less, important. Or, as we might say, because in the
present society it is we who have to solve the economic problems
of our lives. To be controlled in our economic pursuits means
to be always controlled unless we declare our specific purpose.
Or, since when we declare our specific purpose we shall also
have to get it approved, we should really be controlled in every-
thing.

The question raised by economic planning is, therefore, not
merely whether we shall be able to satisfy what we regard as
our more or less important needs in the way we prefer. It is
whether it shall be we who decide what is more, and what is
less, important for us, or whether this is to be decided by the
planner. Economic planning would not affect merely those of
our marginal needs that we have in mind when we speak con-
temptuously about the merely economic. It would, in effect,
mean that we as individuals should no longer be allowed to
decide what we regard as marginal.

The authority directing all economic activity would control
not merely the part of our lives which is concerned with inferior
things ; it would control the allocation of the limited means for
all our ends. And whoever controls all economic activity controls
the means for all our ends, and must therefore decide which are
to be satisfied and which not. This is really the crux of the
matter. Economic control is not merely control of a sector of
human life which can be separated from the rest ; it is the con-
trol of the means for all our ends. And whoever has sole control
of the means must also determine which ends are to be served,
which values are to be rated higher and which lower, in short,

ECONOMIC CONTROL AND TOTALITARIANISM 69

what men should believe and strive for. Central planning means
that the economic problem is to be solved by the community
instead of by the individual ; but this involves that it must
also be the community, or rather its representatives, who must
decide the relative importance of the different needs.

The so-called economic freedom which the planners promise
us means precisely that we are to be relieved of the necessity
of solving our own economic problems and that the bitter choices
which this often involves are to be made for us. Since under
modem conditions we are for almost everything dependent on
means which our fellow men provide, economic planning would
involve direction of almost the whole of our life. There is
hardly an aspect of it, from our primary needs to our relations
with our family and friends, from the nature of our work to the
use of our leisure, over which the planner would not exercise
his “ conscious control

* * * * *

The power of the planner over our private lives would be no
less complete if he chose not to exercise it by direct control of
our consumption. Although a planned society would probably
to some extent employ rationing and similar devices, the power
of the planner over our private lives does not depend on this,
and would be hardly less effective if the consumer were nomin-
ally free to spend his income as he pleased. The source of this
power over all consumption which in a planned society the
authority would possess would be their control over production.

Our freedom of choice in a competitive society rests on the
fact that, if one person refuses to satisfy our wishes we can turn
to another. But if we face a monopolist we are at his mercy.
And an authority directing the whole economic system would
be the most powerful monopolist conceivable. While we need
probably not be afraid that such an authority would exploit this
power in the manner in which a private monopolist would do
so, while its purpose would presumably not be the extortion of

1 The extent of the control over all life that economic control confers is
nowhere better illustrated than in the field of foreign exchanges. Nothing
would at first seem to affect private life less than a state control of the dealings
in foreign exchange, and most people will regard its introduction with complete
indifference. Yet the experience of most continental countries has taught
thoughtful people to regard this step as the decisive advance on the path to
totalitarianism and the suppression of individual liberty. It is in fact the
complete delivery of the individual to the tyranny of the state, the final suppres-
sion of all means of escape — not merely for the rich, but for everybody. Once
the individual is no longer free to travel, no longer free to buy foreign books
or journals, once all the means of foreign contact can be restricted to those of
whom official opinion approves or for whom it is regarded as necessary, the
effective control of opinion is much greater than that ever exercised by any
of the absolutist governments of the seventeenth and eighteenth centuries. 3

THE ROAD TO SERFDOM

70

maximum financial gain, it would have complete power to decide
what we are to be given and on what terms. It would not only
decide what commodities and services were to be available, and
in what quantities ; it would be able to direct their distribution
between districts and groups and could, if it wished, discrim-
inate between persons to any degree it liked. If we remember
why planning is advocated by most people, can there be much
doubt that this power would be used for the ends of which the
authority approves and to prevent the pursuits of ends which
it disapproves ?

The power conferred by the control of production and prices
is almost unlimited. In a competitive society the prices we
have to pay for a thing, the rate at which we can get one thing
for another, depend on the quantities of other things of which,
by taking one, we deprive the other members of society. This
price is not determined by the conscious will of anybody. And
if one way of achieving our ends proves too expensive for us,
we are free to try other ways. The obstacles in our path are
not due to somebody disapproving of our ends, but to the fact
that the same means are also wanted elsewhere. In a directed
economy, where the authority watches over the ends pursued,
it is certain that it would use its powers to assist some ends and
to prevent the realisation of others. Not our own view, but
somebody else’s, of what we ought to like or dislike would deter-
mine what we should get. And since the authority would have
the power to thwart any efforts to elude its guidance, it would
control what we consume almost as effectively as if it directly
told us how to spend our income.

* # # # #

Not only in our capacity as consumers, however, and not
even mainiy in that capacity, would the will of the authority
shape and “ guide ” our daily lives. It would do so even
more in our position as producers. These two aspects of our
lives cannot be separated ; and as for most of us the time we
spend at our work is a large part of our whole lives, and as our
job usually also determines the place where and the people among
whom we live, some freedom in choosing our work is, probably,
even more important for our happiness than freedom to spend
our income during the hours of leisure.

No doubt it is true that even in the best of worlds this freedom
will be very limited. Few people have ever an abundance of
choice of occupation. But what matters is that we have some
choice, that we are not absolutely tied to a particular job which
has been chosen for us, or which we may have chosen in the
past, and that if one position becomes quite intolerable, or if

ECONOMIC CONTROL AND TOTALITARIANISM 7 1

we set our heart on another, there is‘ almost always a way for the
able, some sacrifice at the price of which he may achieve his
goal. Nothing makes conditions more unbearable than the
knowledge that no effort of ours can change them ; and even
if we should never have the strength of mind to make the neces-
sary sacrifice, the knowledge that we could escape if we only
strove hard enough makes many otherwise intolerable positions
bearable.

This is not to say that in this respect all is for the best in our
present world, or has been so in the most liberal past, and that
there is not much that could be done to improve the opportunities
of choice open to the people. Here as elsewhere the state
can do a great deal to help the spreading of knowledge and
information and to assist mobility. But the point is that the
kind of state action which really would increase opportunity is
almost precisely the opposite of the “ planning ” which is now
generally advocated and practised. Most planners, it is true,
promise that in the new planned world free choice of occupation
will be scrupulously preserved or even increased. But there
they promise more than they can possibly fulfil. If they want
to plan they must control the entry into the different trades
and occupations, or the terms of remuneration, or both. In
almost all known instances of planning the establishment of such
controls and restrictions was among the first measures taken.
If such control were universally practised and exercised by a
single planning authority, one needs little imagination to see
what would. become of the “ free choice of occupation ” promised.
The “ freedom of choice ” would be purely fictitious, a mere
promise to practise no discrimination where in the nature of
the case discrimination must be practised, and where all one
could hope would be that the selection would be made on what
the authority believed to be objective grounds.

There would be little difference if the planning authority con-
fined itself to fixing the terms of employment and tried to regulate
numbers by adjusting these terms. By prescribing the remunera-
tion it would no less effectively bar groups of people from entering
many trades than by specifically excluding them. A rather plain
girl who badly wants to become a saleswoman, a weakly boy who
has set his heart on a job where his weakness handicaps him,
as well as in general the apparently less able or less suitable are
not necessarily excluded in a competitive society ; if they value
the position sufficiently, they will frequently be able to get a
start by a financial sacrifice and will later make good through
qualities which at first are not so obvious. But when the authority
fixes the remuneration for a whole category and the selection
among the candidates is made by an objective test, the strength,

THE ROAD TO SERFDOM

72

of their desire for the job will count for very little. The person
whose qualifications are not of the standard type, or whose tem-
perament is not of the ordinary kind, will no longer be able to
come to special arrangements with an employer whose dispo-
sitions will fit in with his special needs : the person who prefers
irregular hours or even a happy-go-lucky existence with a small
and perhaps uncertain income to a regular routine will no longer
have the choice. Conditions will be without exception what in
some measure they inevitably are in a large organisation — or
rather worse, because there will be no possibility of escape.
We shall no longer be free to be rational or efficient only when
and where we think it worth while, we shall all have to conform
to the standards which the planning authority must fix in order
to simplify its task. To make this immense task manageable it
will have to reduce the diversity of human capacities and inclina-
tions to a few categories of readily interchangeable units and
deliberately to disregard minor personal differences. Although
the professed aim of planning would be that man should cease
to be a mere means, in fact — since it would be impossible to
take account in the plan of individual likes and dislikes — the
individual would more than ever become a mere means, to be
used by the authority in the service of such abstractions as the
“ social welfare ” or the “ good of the community ”.

# * * * *

That in a competitive society most things can be had at a price —
though it is often a cruelly high price we have to pay, is a fact
the importance of which can hardly be overrated. The alterna-
tive is not, however, complete freedom of choice, but orders
and prohibitions which must be obeyed and, in the last resort,
the favour of the mighty.

It is significant of the confusion prevailing on all these subjects
that it should have become a cause for reproach that in a com-
petitive society almost everything can be had at a price. If
the people who protest against the higher values of life being
brought into the “ cash nexus ” that we should not be allowed
to sacrifice our lesser needs in order to preserve the higher
values, and that the choice should be made for us, this demand
must be regarded as rather peculiar and scarcely testifies to
great respect for the dignity of the individual. That life and
health, beauty and virtue, honour and peace of mind, can often
be preserved only at considerable material cost, and that somebody
must make the choice, is as undeniable as that we all are some-
times not prepared to make the material sacrifices necessary to
protect those higher values against all injury. To take only one
1 example : we could, of course, reduce casualties by motor

ECONOMIC CONTROL AND TOTALITARIANISM 73

accidents to zero if we were willing to bear the cost — if in no
other way — by abolishing motor-cars. And the same is true of
thousands of other instances in which we are constantly risking
life and health and all the fine values of the spirit, of ourselves
and of our fellow men, to further what we at the same time
contemptuously describe as our material comfort. Nor can it
be otherwise since all our ends compete for the same means ;
and we could not strive for anything but these absolute values
if they were on no account to be endangered.

That people should wish to be relieved of the bitter choice
which hard facts often impose upon them is not surprising. But
few want to be relieved through the choice being made for them
by others. People just wish that the choice should not be
necessary at all. And they are only too ready to believe that
the choice is not really necessary, that it is imposed upon them
merely by the particular economic system under which we live.
What they resent is in truth that there is an economic problem.

In their wishful belief that there is really no longer an economic
problem people have been confirmed by irresponsible talk about
“ potential plenty ” — which, if it were a fact, would indeed mean
that there is no economic problem which makes the choice in-
evitable. But although this snare has served socialist propaganda
under various names as long as socialism has existed, it is still as
palpably untrue as it was when it was first used over a hundred
years ago. In all this time not one of the many people who have
used it has produced a workable plan of how production could
be increased so as to abolish even in Western Europe what we
regard as poverty — not to speak of the world as a whole. The
reader may take it that whoever talks about potential plenty is
either dishonest or does not know what he is talking about . 1
Yet it is this false hope as much as anything which drives us
along the road to planning.

1 To justify these strong words the following conclusions may be quoted at
which Mr. Colin Clark, one of the best known among the younger economic
statisticians, and a man of undoubted progressive views and a strictly scientific
outlook, has arrived in his Conditions of Economic Progress (1940, pp. 3-4) :
The “ oft-repeated phrases about poverty in the midst of plenty, and the
problems of production having already been solved if only we understood the
problem of distribution, turn out to be the most untruthful of all modem
cliches. . . . The under-utilisation of productive capacity is a question of
considerable importance only in the U.S.A., though in certain years also it has
been of some importance in Great Britain, Germany and France, but for most
of the world it is entirely subsidiary to the more important fact that, with
productive resources fully employed, they can produce so little. The age of
plenty will still be a long while in coming. ... If preventable unemployment
were eliminated throughout the trade cycle, this would mean a distinct improve-
ment in the standard of living of the population of the U.S.A., but from the
standpoint of the world as a whole it would only make a small contribution
towards the much greater problem of raising the real income of the bulk of
the world population to anything like a civilised standard.”

THE ROAD TO SERFDOM

74

While the popular movement still profits by this false belief,
the claim that a planned economy would produce a substantially
larger output than the competitive system is being progressively
abandoned by most students of the problem. Even a good many
economists with socialist views who have seriously studied the
problems of central planning are now content to hope that a
planned society will equal the efficiency of a competitive system ;
they advocate planning no longer because of its superior pro-
ductivity but because it will enable us to secure a more just
and equitable distribution of wealth. This is, indeed, the only
argument for planning which can be seriously pressed. It is
indisputable that if we want to secure a distribution of wealth
which conforms to some predetermined standard, if we want
consciously to decide who is to have what, we must plan the
whole economic system. But the question remains whether the
price we should have to pay for the realisation of somebody’s
ideal of justice is not bound to be more discontent and more
oppression than was ever caused by the much abused free play
of economic forces.

* # # # #

We should be seriously deceiving ourselves if for these appre-
hensions we sought comfort in the consideration that the adoption
of central planning would merely mean a return, after a brief
spell of a free economy, to the ties and regulations which have
governed economic activity through most ages, and that,
therefore, the infringements of personal liberty need not be
greater than they were before the age of laissez-faire. This is
a dangerous illusion. Even during the periods of European
history when the regimentation of economic life went furthest,
it amounted to little more than the creation of a general and
semi-permanent framework of rules within which the individual
preserved a wide free sphere. The apparatus of control then
available would not have been adequate to impose more than
very general directions. And even where the control was most
complete it extended only to those activities of a person through
which he took part in the social division of labour. In the
much wider sphere in which he then still lived on his own products
he was free to act as he chose.

- The situation is now entirely different. During the liberal
era the progressive division of labour has created a situation
where almost every one of our activities is part of a social process.
This is a development which we cannot reverse since it is only
because of it that we can maintain the vastly increased population
at anything like present standards. But, in consequence, the
substitution of central planning for competition would require

ECONOMIC CONTROL AND TOTALITARIANISM 75

central direction of a much greater part of our lives than was
ever attempted before. It could not stop at what we regard as
our economic activities, because we are now for almost every
part of our lives dependent on somebody else’s economic activi-
ties . 1 The passion for the “ collective satisfaction of our needs ”,
with which our socialists have so well prepared the way for totali-
tarianism, and which wants us to take our pleasures as well as
our necessities at the appointed time and in the prescribed form,
is, of course, partly intended as a means of political education.
But it is also the result of the exigencies of planning, which
consists essentially in depriving us of choice, in order to give
us whatever fits best into the plan and that at a time determined
by the plan.

It is often said that political freedom is meaningless without
economic freedom. This is true enough, but in a sense almost
opposite from that in which the phrase is used by our planners.
The economic freedom which is the prerequisite of any other
freedom cannot be the freedom from economic care which the
socialists promise us and which can be obtained only by relieving
the individual at the same time of the necessity and of the power
of choice ; it must be the freedom of our economic activity
which, with the right of choice, inevitably also carries the risk
and the responsibility of that right.

1 It is no accident that in the totalitarian countries, be it Russia or Germany
or Italy, the question of how to organise the people’s leisure should, have
become a problem of planning. The Germans have even invented for this
problem the horrible and self-contradictory name of Freizeitgestaltung (literally :
the shaping of the use made of the people’s free time) as if it were still “ free
time ” when it has to be spent in the way ordained by authority

CHAPTER VIII

WHO, WHOM?

The finest opportunity ever given to the world was thrown
away because the passion for equality made vain the hope for
freedom.

Lord Acton.

IT is significant that one of the commonest objections to com-
petition is that it is “ blind ”. It is not irrelevant to recall that
to the ancients blindness was an attribute of their deity of justice.
Although competition and justice may have little else in common,
it is as much a commendation of competition as of justice that
it is no respecter of persons. That it is impossible to foretell
who will be the lucky ones or whom disaster will strike, that
rewards and penalties are not shared out according to some-
body’s views about the merits or demerits of different people,
but depend on their capacity and their luck, is as important as
that in framing legal rules we should not be able to predict
which particular person will gain and which will lose by their
application. And this is none the less true because in competition
chance and good luck are often as important as skill and foresight
in determining the fate of different people.

The choice open to us is not between a system .in which every-
body will get what he deserves according to some absolute and
universal standard of right, and one where the individual shares
are determined partly by accident or good or ill chance, but
between a system where it is the will of a few persons that decides
who is to get what, and one where it depends at least partly on
the ability and enterprise of the people concerned and partly
on unforeseeable circumstances. This is no less relevant because
in a system of free enterprise chances are not equal, since such
a system is necessarily based on private property and (though
perhaps not with the same necessity) on inheritance, with the
differences in opportunity which these create. There is indeed
a strong case for reducing this inequality of opportunity as far
as congenital differences permit and as it is possible to do so
without destroying the impersonal character of the process by
which everybody has to take his chance and no person’s view
about what is right and desirable overrules that of others.

The fact that the opportunities open to the poor in a competitive
society are much more restricted than those open to the rich
does not make it less true that in such a society the poor are
much more free than a person commanding much greater material

76

WHO, WHOM ? 77

comfort in a different type of society. Although under com-
petition the probability that a man who starts poor will reach
great wealth is much smaller than is true of the man who has
inherited property, it is not only possible for the former, but the
competitive system is the only one where it depends solely on
him and not on the favours of the mighty, and where nobody
can prevent a man from attempting to achieve this result. It
is only because we have forgotten what unfreedom means that
we often overlook the patent fact that in every real sense a badly
paid unskilled worker in this country has more freedom to shape
his life than many a small entrepreneur in Germany or a much
better paid engineer or manager in Russia. Whether it is a
question of changing his job or the place where he lives, of
professing certain views or of spending his leisure in a particular
manner, although sometimes the price he may have to pay for
following his inclinations may be high, and to many appear too
high, there are no absolute impediments, no dangers to bodily
security and freedom that confine him by brute force to the task
and the environment to which a superior has assigned him.

That the ideal of justice of most socialists would be satisfied if
merely private income from property were abolished and the
differences between the earned incomes of different people
remained what they are now, is true . 1 What these people forget
is that in transferring all property in the means of production
to the state they put the state in a position whereby its action
must in effect decide all other incomes. The power thus given
to the state and the demand that the state should use it to “ plan ”
means nothing else than that it should use it in full awareness
of all these effects.

To believe that the power which is thus conferred on the state
is merely transferred to it from others is erroneous. It is a
power which is newly created and which in a competitive society
nobody possesses. So long as property is divided among many
owners, none of them acting independently has exclusive power

1 It is probable that we habitually overestimate the extent to which inequality
of incomes is mainly caused by income derived from property, and therefore
the extent to which the major inequalities would be abolished by abolishing
income from property. What little information we have about the distribution
of incomes in Soviet Russia does not suggest that the inequalities are there
substantially smaller than in a capitalist society. Max Eastman ( The End of
Socialism in Russia , 1937, pp. 30-4) gives some information from official Russian
sources which suggest that the difference between the highest and the lowest
salaries paid in Russia is of the same order of magnitude (about 50 to 1) as
in the United States ; and Leon Trotsky, according to an article quoted by
James Burnham ( The Managerial Revolution, 1941, p. 43), estimated as late
as 1939 that “ the upper 11 or 12 per cent, of the Soviet population now receives
approximately 50 per cent, of the national income. This differentiation is
sharper than in the United States, where the upper 10 per cent, of the population
receives approximately 35 per cent, of the national income.”

THE ROAD TO SERFDOM

78

to determine the income and position of particular people — nobody
is tied to him except by the fact that he may offer better terms
than anybody else.

What our generation has forgotten is that the system of private
property is the most important guarantee of freedom, not only
for those who own property, but scarcely less for those who
do not. It is only because the control of the means of production
is divided among many people acting independently that nobody
has complete power over us, that we as individuals can decide
what to do with ourselves. If all the means of production were
vested in a single hand, whether it be nominally that of “ society ”
as a whole, of that of a dictator, whoever exercises this control
has complete power over us. Who can seriously doubt that a
member of a small racial or religious minority will be freer with
no property so long as fellow members of his community have
property and are therefore able to employ him, than he would
be if private property were abolished and he became owner of
a nominal share in the communal property. Or that the power
which a multiple millionaire, who may be my neighbour and
perhaps my employer, has over me is very much less than that
which the smallest fonctionaire possesses who wields the coercive
power of the state and on whose discretion it depends whether
and how I am to be allowed to live or to work ? And who will
deny that a world in which the wealthy are powerful is still a
better world than one in which only the already powerful can
acquire wealth ?

It is pathetic, yet at the same time encouraging, to find as
prominent an old communist as Mr. Max Eastman rediscovering
this truth :

It seems obvious to me now [he writes in a recent article] — though
I have been slow, I must say, in coming to the conclusion — that the
institution of private property is one of the main things that have
given man that limited amount of free and equalness that Marx
hoped to render infinite by abolishing this institution. Strangely
enough Marx was the first to see this. He is the one who informed
us, looking backwards, that the evolution of private capitalism with
its free market had been a precondition for the evolution of all our
democratic freedoms. It never occurred to him, looking forward,
that if this was so, these other freedoms might disappear with the
abolition of the free market . 1

* # # # #

It is sometimes said, in answer to such apprehensions, that
there is no reason why the planner should determine the incomes
of individuals. The social and political difficulties involved in

1 Max Eastman in The Reader’s Digest, July 1941, p. 39.

WHO, WHOM ? 79

deciding the shares of different people in the national income
are so obvious that even the most inveterate planner may well
hesitate before he charges any authority with this task. Probably
everybody who realises what it involves would prefer to confine
planning to production, to use it only to secure a “ rational
organisation of industry ”, leaving the distribution of incomes as
far as- possible to impersonal forces. Although it is impossible
to direct industry without exercising some influence on distribu-
tion, and although no planner will wish to leave distribution
entirely to the forces of the market, they would probably all
prefer to confine, themselves to seeing that this distribution con-
forms to certain general rules of equity and fairness, that extreme
inequalities are avoided, and that the relation between the remun-
eration of the major classes is just, without undertaking the
responsibility for the position of particular people within their
class, or for the gradations and differentiations between smaller
groups and individuals.

We have already seen that the close interdependence of all
economic phenomena makes it difficult to stop planning just
where we wish, and that, once the free working of the market
is impeded beyond a certain degree, the planner will be forced
to extend his controls till they become all-comprehensive. These
economic considerations, which explain why it is impossible to
stop deliberate control just where we should wish, are strongly
reinforced by certain social or political tendencies whose strength
makes itself increasingly felt as planning extends.

Once it becomes increasingly true, and is generally recognised,
that the position of the individual is determined not by impersonal
forces, not as a result of the competitive effort of many, but by
the deliberate, decision of authority, the attitude of the people
towards their position in the social order necessarily changes.
There will always exist inequalities which will appear unjust to
those who suffer from them, disappointments which will appear
unmerited, and strokes of misfortune which those hit have not
deserved. But when these things occur in a society which is
consciously directed, the way in which people will react will
be very different from what it is when they are nobody’s conscious
choice. Inequality is undoubtedly more readily borne, and
affects the dignity of the person much less, if it is determined
by impersonal forces, than when it is due to design. In a com-
petitive society it is no slight to a person, no offence to his dignity,
to be told by any particular firm that it has no need for his
services, or that it cannot offer him a better job. It is true that
in periods of prolonged mass-unemployment the effect on many
may be very similar. But there are other and better methods
to prevent that scourge than central direction. But the unemploy-

THE ROAD TO SERFDOM

8o

ment or the loss of income which will always affect some in
any society is certainly less degrading if it is the result of mis-
fortune and not deliberately imposed by authority. However
bitter the experience, it would be very much worse in a planned
society. There individuals will have to decide not whether a
person is needed for a particular job, but whether he is of use
for anything, and how useful he is. His position in life must
be assigned to him by somebody else.

While people will submit to suffering which may hit anyone,
they will not so easily submit to suffering which is the result of
the decision of authority. It may be bad to be just a cog in
an impersonal machine ; but it is infinitely worse if we can no
longer leave it, if we are tied to our place and to the superiors
who have been chosen for us. Dissatisfaction of everybody with
his lot will inevitably grow with the consciousness that it is the
result of deliberate human decision.

Once government has embarked upon planning for the sake of
justice, it cannot refuse responsibility for anybody’s fate or
position. In a planned society, we shall all know that we are
better or worse off than others, not because of circumstances
which nobody controls, and which it is impossible to foresee
with certainty, but because some authority wills it. And all
our efforts directed towards improving our position will have to
aim, not at foreseeing and preparing as well as we can for the
circumstances over which we have no control, but at influencing
in our favour the authority which has all the power. The
nightmare of’ English nineteenth-century political thinkers : the
state in which “ no avenue to wealth and honour would exist
save through the government ” 1 would be realised in a com-
pleteness which they never imagined — though familiar enough
in some countries which have since passed to totalitarianism.

# # * # #

As soon as the state takes upon itself the task of planning the
whole economic life, the problem of the due station of the
different individuals and groups must indeed inevitably become
the central political problem. As the coercive power of the
state will alone decide who is to have what, the only power
worth having will be a share in the exercise of this directing
power. There will be no economic or social questions that
would not be political questions in the sense that their solution
will depend exclusively on who wields the coercive power, on
whose are the views that will prevail on all occasions.

I believe it was Lenin himself who introduced to Russia the
famous phrase^ “ who, whom ? ” — during the early years of Soviet
1 The actual words are those of the young Disraeli.

WHO, WHOM ? 8 1

rule the byword in which the people summed up the universal
problem of a socialist society . 1 Who plans whom, who directs
and dominates whom, who assigns to other people their station
in life, and who is to have his due allotted by others ? These
become necessarily the central issues to be decided solely by
the supreme power.

More recently an American student of politics has enlarged
upon Lenin’s phrase and asserted that the problem of all govern-
ment is “ who gets what, when, and how ? ” In a way this is
not untrue. That all government affects the relative position of
different people and that there is under any system scarcely an
aspect of our lives which may not be affected by government
action, is certainly true. In so far as government does anything
at all, its action will always have some effect on “ who gets what,
when, and how ”.

There are, however, two fundamental distinctions to be made.
First, particular measures may be taken without the possibility of
knowing how they will affect particular individuals and therefore
without aiming at such particular effects. This point we have
already discussed. Secondly, it is the extent of the activities of
the government which decides whether everything that any person
gets at any time depends on the government, or whether its
influence is confined to whether some people will get some things
in some way at some time. Here lies the whole difference between
a free and a totalitarian system.

The contrast between a liberal and a totally planned system
is characteristically illustrated by the common complaints of
Nazis and socialists of the “ artificial separations of economics
and politics ”, and their equally common demand for the domin-
ance of politics over economics. These phrases presumably
mean not only that economic forces are now allowed to work
for ends which are not part of the policy of the government,
but also that economic power' can be used independently of
government direction and for ends of which the government
may not approve. But the alternative is not merely that there
should be only one power, but that this single power, the ruling
group, should have control over all human ends, and particularly
that it should have complete power over the position of each
individual in society.

* # # # *

That a government which undertakes to direct economic
activity will have to use its power to realise somebody’s ideal of
distributive justice is certain. But how can and how will it use that

1 Cf. M. Muggeridge, Winter in Moscow, 1934 ; A. Feiler, The Experiment of %
Bolshevism, 1930.

82 THE ROAD TO SERFDOM

power ? By what principles will it or ought it to be guided ? Is
there a definite answer to the innumerable questions of relative
merits that will arise and which will have to be solved deliberately ?
Is there a scale of values on which reasonable people can be
expected to agree, which would justify a new hierarchical order
of society, and is likely to satisfy the demands for justice ?

There is only one general principle, one simple rule which
would indeed provide a definite answer to all these questions :
equality, complete and absolute equality of all individuals in
all those points which are subject to human control. If this
were generally regarded as desirable (quite apart from the ques-
tion whether it would be practicable, i.e., whether it would
provide adequate incentives), it would give the vague idea of
distributive justice a clear meaning and would give the planner
definite guidance. But nothing is further from the truth than
that people in general regard mechanical equality of this kind
as desirable. No socialist movement which aimed at complete
equality has ever gained substantial support. What socialism
promised was not an absolutely equal, but a more just and more
equal distribution. Not equality in the absolute sense, but
“ greater equality ” is the only goal which is seriously aimed at.

Though these two ideals sound very similar, they are as different
as possible as far as our problem is concerned. While absolute
equality would clearly determine the planner’s task, the desire
for greater equality is merely negative, no more than an expression
of dislike of the present state of affairs ; and so long as we are
not prepared to say that every move in the direction towards
complete equality is desirable, it answers scarcely any of the
questions the planner will have to decide.

This is not a quibble about words. We face here a crucial
issue which the similarity of the terms used is apt to conceal.
While agreement on complete equality would answer all the
problems of merit the planner must answer, the formula of the
approach to greater equality answers practically none. Its con-
tent is hardly more definite than the phrases “ common good ”
or “ social welfare It does not free us from the necessity of
deciding in every particular instance between the merits of
particular individuals or groups, and gives us no help in that
decision. All it tells us in effect is to take from the rich as
much as we can. But when it comes to the distribution of the
spoils, the problem is the same as if the formula of “ greater
equality ” had never been conceived.

* # * # #

Most people find it difficult to admit that we do not possess
moral standards which would enable us to settle these questions

WHO, WHOM ? 83

— if not perfectly, at least to greater general satisfaction than is
done by the competitive system. Have we not all some idea of
what is a “ just price ” or a “ fair wage ” ? Can' we not rely
on the strong sense of fairness of the people ? And even if
we do not now agree fully on what is just or fair in a particular
case, would popular ideas not soon consolidate into more definite
standards if people were given an opportunity to see their ideals
realised ?

Unfortunately there is little ground for such hopes. What
standards we have are derived from the competitive regime we
have known, and would necessarily disappear soon after the
disappearance of competition. What we mean by a just price,
or a fair wage, is either the customary price or wage, the return
which past experience has made people expect, or the price
or wage that would exist if there were no monopolistic exploita-
tion. The only important exception to this used to be the claim
of the workers to the “ full produce of their labour ”, to which
so much of socialist doctrine traces back. But there are few
socialists to-day who believe that in a socialist society the output
of each industry would be entirely shared by the workers of that
industry ; for this would mean that workers in industries using
a great deal of capital would have a much larger income than
those in industries using little capital, which most socialists
would regard as very unjust. And it is now fairly generally
agreed that this particular claim was based on an erroneous
interpretation of the facts. But once the claim of the individual
worker to the whole of “ his ” product is disallowed, and the whole
of the return from capital is to be divided among all workers,
the problem of how to" divide it raises the same basic issue.

What the “ just price ” of a particular commodity or the “ fair ”
remuneration for a particular service is, might "conceivably be
determined objectively if the quantities needed were indepen-
dently fixed. If these were given irrespective of cost, the planner
might try to find what price or wage is necessary to bring forth
this supply. But the planner must also decide how much is to
be produced of each kind of goods, and in so doing he determines
what will be the just price or fair wage to pay. If the planner
decides that fewer architects or watch-makers are wanted and
that the need can be met by those who are willing to stay in
the trade at a lower remuneration, the “ fair ” wage will be lower.
In deciding the relative importance of the different ends, the
planner also decides the relative importance of the different
groups and persons. As he is not supposed to treat the people
merely as a means, he must take account of these effects and
consciously balance the importance of the different ends against
the effects of his decision. This means, however, that he will*

84 the road to serfdom

necessarily exercise direct control over the conditions of the
different people.

This applies to the relative position of individuals no less
than to that of the different occupational groups. We are in
general far too apt to think of incomes within a given trade or
profession as more or less uniform. But the differences between
the incomes, not only of the most and the least successful doctor
or architect, writer or cinema actor, boxer or jockey, but also
of the more and the less successful plumber or market gardener,
grocer or tailor, are as great as those between the propertied
and the property-less classes. And although, no doubt, there
would be some attempt at standardisation by creating categories,
the necessity of discrimination between individuals would remain
the same, whether it were exercised by fixing their individual
incomes or by allocating them to particular categories.

We need say no more about the likelihood of men in a free
society submitting to such control — or about their remaining
free if they submitted. On the whole question what John
Stuart Mill wrote nearly a hundred years ago remains equally
true to-day :

A fixed rule, like that of equality, might be acquiesced in, and
so might chance, or an external necessity ; but that a handful of
human beings should weigh everybody in the balance, and give
more to one and less to another at their sole pleasure and judgement,
would not be borne unless from persons believed to be more than
men, and backed by supernatural terrors. 1

*****

These difficulties need not lead to open clashes so long as
socialism is merely the aspiration of a limited and fairly homo-
geneous group. They come to the surface only when a socialist
policy is actually attempted with the support of the many different
groups which together compose the majority of a people. Then
it soon becomes the one burning question which of the different
sets of ideals shall be imposed upon all by making the whole
resources of the country serve it. It is because successful plan-
ning requires the creation of a common view on the essential
values that the restriction of our freedom with regard to material
things touches so directly on our spiritual freedom.

Socialists, the cultivated parents of the barbarous offspring
they have produced, traditionally hope to solve this problem by
education. But what does education mean in this respect ?
Surely we have learnt that knowledge cannot create new ethical
values, that no amount of learning will lead people to hold the
same views on the moral issues which a conscious ordering of
1 1 J. S. Mill, Principles of Political Economy, Bk. I, Ch. II, Para. 4.

WHO, WHOM ? 85

all social relations raises. It is not rational conviction but the
acceptance of a creed which is required to justify a particular
plan. And, indeed, socialists everywhere were the first to
recognise that the task they had set themselves required the
general acceptance of a common Weltanschauung, of a definite
set of values. It was in these efforts to produce a mass move-
ment supported by such a single world view, that the socialists
first created most of the instruments of indoctrination of which
Nazis and Fascists have made such effective use.

In Germany and Italy the Nazis and Fascists did indeed not
have much to invent. The usages of the new political movements
which pervaded all aspects of life had in both countries already
been introduced by the socialists. The idea of a political party
which embraces all activities of the individual from the cradle
to the grave, which claims to guide his views on everything, and
which delights in making all problems questions of party-
Weltanschauung, was first put into practice by the socialists.
An Austrian socialist writer, speaking of the socialist movement
of his country, reports with pride that it was its “ characteristic
feature that it created special organisations for every field of
activities of workers and employees ’’A But though the Austrian
socialists may have gone further in this respect than others, the
situation was not very different elsewhere. It was not the Fascists
but the socialists who began to collect children from the tenderest
age into political organisations to make sure that they grew up
as good proletarians. It was not the Fascists but the socialists
who first thought of organising sports and games, football and
hiking, in party clubs where the members would not be infected
by other views. It was the socialists who first insisted that the
party member should distinguish himself from others by the
modes of greeting and the forms of address. It was they who
by their organisation of “ cells ” and devices for the permanent
supervision of private life created the prototype of the totali-
tarian party. Balilla and Hitlerjugend, Dopolavoro and Kraft
durch Freude, political uniforms and military party formations,
are all little more than imitations of older socialist institutions. 8

*#**#’

So long as the socialist movement in a country is closely bound
up with the interests of a particular group, usually the more
highly skilled industrial workers, the problem of creating a
common view on the desirable status of the different members
of society is comparatively simple. The movement is immedi-

1 G. Wieser, Ein Staat stirbt, Oesterreich 1934-1338, Paris, 1938, p. 41.

* The political “ book clubs ” in this country provide a not unimportant
parallel.

86 THE ROAD TO SERFDOM

ately concerned with the status of one particular group and its
aim is to raise that status relatively to other groups. The char-
acter of the problem changes, however, as in the course of the
progressive advance towards socialism it becomes more and more
evident to everybody that his income and general position is
determined by the coercive apparatus of the state, that he can
maintain or improve his position only as a member of an organised
group capable of influencing or controlling the state machine
in his interest. In the tug-of-war between the various pressure
groups which arises at this stage, it is by no means necessary
that the interests of the poorest and most numerous groups
should prevail. Nor is it necessarily an advantage for the older
socialist parties, who avowedly represented the interests of a
particular group, to have been the first in the field, and to have
designed their whole ideology to appeal to the manual workers
in industry. Their very success, and their insistence on the
acceptance of the whole creed, is bound to create a powerful
counter-movement — not by the capitalists, but by the very
large and equally propertyless classes 'who find their relative
status threatened by the advance of the elite of the industrial
workers.

Socialist theory and socialist tactics, even where they have not
been dominated by Marxist dogma, have been based everywhere
on the idea of a division of society into two classes with common
but mutually conflicting interests : capitalists and industrial
workers. Socialism counted on a rapid disappearance of the
old middle class and completely disregarded the rise of a new
middle class, the countless army of clerks and typists, adminis-
trative workers and school teachers, tradesmen and small officials,
and the lower ranks of the professions. For a time these classes
often provided many of the leaders of the labour movement.
But as it became increasingly clear that the position of those
classes was deteriorating relatively to that of the industrial workers,
the ideals which guided the latter lost much of their appeal to
the others. While they were all socialists in the sense that they
disliked the capitalist system and wanted a deliberate sharing
out of wealth according to their ideas of justice, these ideas
proved to be very different from those embodied in the practice
of the older socialist parties.

The means which the old socialist parties had successfully
employed to secure the support of one occupational group — the
raising of their relative economic position — cannot be used to
secure the support of all. There are bound to arise rival socialist
movements that appeal to the support of those whose relative
position is worsened. There is a great deal of truth in the
often heard statement that Fascism and National Socialism are

WHO, WHOM ? 87

a sort of middle-class socialism — only that in Italy and Germany
the supporters of these new movements were economically hardly
a middle class any longer. It was to a large extent a revolt of
a new under-privileged class against the labour aristocracy which
the industrial labour movement had created. There can be
little doubt that no single economic factor has contributed more
to help these movements than the envy of the unsuccessful
professional man, the university trained engineer or lawyer, and
of the “ white collared proletariat ” in general, of the engine
driver or compositor and other members of the strongest trade
unions whose income was many times theirs. Nor can there
be much doubt that in terms of money income the average
member of the rank and file of the Nazi movement in its early
years was poorer than the average trade unionist or member of
the older socialist party — a circumstance which only gained
poignancy from the fact that the former had often seen better
days and were frequently still living in surroundings which were
the result of this past. The expression “ class struggle a rebours ”,
current in Italy at the time of the rise of Fascism, did point to a
very important aspect of the movement. The conflict between
the Fascist or National-Socialist and the older socialist parties
must indeed very largely be regarded as the kind of conflict
which is bound to arise between rival socialist factions. There
was no difference between them about the question of it being
the will of the state which should assign to each person his
proper place in society. But there were, as there always will
be, most profound differences about what are the proper places
of the different classes and groups.

*****

The old socialist leaders, who had always regarded their
parties as the natural spearhead of the future general movement
towards socialism, found it difficult to understand that with every
extension in the use of socialist methods the resentment of large
poor classes should turn against them. But while the old socialist
parties, or the organised labour in particular industries, had
usually not found it unduly difficult to come to an understanding
for joint action with the employers in their particular industries,
very large classes were left out in the' cold. To them, and not
without some justification, the more prosperous sections of the
labour movement seemed to belong to the exploiting rather than
to the exploited class . 1

1 It is now twelve years since one of the leading European socialist intel-
lectuals, Hendrick de Man (who has since consistently developed further and
made his peace with the Nazis), observed that “ for the first time since the
beginning of socialism, anti-capitalist ^resentments are turning against the
socialist movement ” ( Sozialismus und National-Faszismus , Potsdam, 1931, p.’ 6).

THE ROAD TO SERFDOM

88

The resentment of the lower middle class, from which Fascism
and National Socialism recruited so large a proportion of their
supporters, was intensified by the fact that their education and
training had in many instances made them aspire to directing
positions, and that they regarded themselves as entitled to be
members of the directing class. While the younger generation,
out of that contempt for profit-making fostered by socialist
teaching, spurned independent positions which involved risk,
and flocked in ever-increasing numbers into salaried positions
which promised security, they demanded a place yielding them
the income and power to which in their opinion their training
entitled them. While they believed in an organised society, they
expected a place in that society very different from that which
society ruled by labour seemed to offer. They were quite ready
to take over the methods of the older socialism but intended to
employ them in the service of a different class. The movement
was able to attract all those who, while they agreed on the desira-
bility of the state controlling all economic activity, disagreed
with the ends for which the aristocracy of the industrial workers
used their political strength.

The new ' socialist movement started with several tactical
advantages. Labour socialism had grown in a democratic and
liberal world, adapting its tactics to it and taking over many of
the ideals of liberalism. Its protagonists still believed that the
creation of socialism as such would solve all problems. Fascism
and National-Socialism, on the other hand, grew out of the
experience of an increasingly regulated society awakening to
the fact that democratic and international socialism was aiming
at incompatible ideals. Their tactics were developed in a world
already dominated by socialist policy and the problems it creates.
They had no illusions about the possibility of a democratic
solution of problems which require more agreement among
people than can reasonably be expected. They had no illusions
about the capacity of reason to decide all the questions of the
relative importance of the wants of different men or groups
which planning inevitably raises, or about the formula of equality
providing an answer. They knew that the strongest group
which rallied enough supporters in favour of a new hierarchical
order of society, and which frankly promised privileges to the
classes to which it appealed, was likely to obtain the support of
all those who were disappointed because they had been promised
equality but found that they had merely furthered the interest
of a particular class. Above all they were successful because
they offered a theory, or Weltanschauung , which seemed to justify
the privileges they promised to their supporters.

CHAPTER IX

SECURITY AND FREEDOM

The whole of society will have become a single office and a
single factory with equality of work and equality of pay.

V. I. Lenin, 1917.

In a country where the sole employer is the State, opposition
means death by slow starvation. The old principle : who
does not work shall not eat, has been replaced by a new one :
who does not obey shall not eat.

L. Trotsky, 1937.

LIICE the spurious “ economic freedom ”, and with more justice,
economic security is often represented as an indispensable con-
dition of real liberty. In a sense this is both true and important.
Independence of mind or strength of character are rarely found
among those who cannot be confident that they will make their
way by their own effort. Yet the idea of economic security is
no less vague and ambiguous than most other terms in this
field ; and because of this the general approval given to the
demand for security may become a danger to liberty. Indeed,
when security is understood in too absolute a sense, the general
striving for it, far from increasing the chances of freedom,
becomes the gravest threat to it.

It will be well to contrast at the outset the two kinds of security :
the limited one, which can be achieved for all, and which is there-
fore no privilege but a legitimate object of desire ; and the
absolute security which in a free society cannot be achieved for
all and which ought not to be given as a privilege — except in a
few special instances such as that of the judges, where complete
independence is of paramount importance. These two kinds of
security are, first, security against severe physical privation, the
certainty of a given minimum of sustenance for all ; and, secondly,
the security of a given standard of life, or of the relative position
which one person or group enjoys compared with others ; or,
as we may put it briefly, the security of a minimum income and
the security of the particular income a person is thought to deserve.
We shall presently see that this distinction largely coincides with
the distinction between the security which can be provided for all
outside of and supplementary to the market system, and the
security which can be provided only for some and only by con-
trolling or abolishing the market.

There is no reason why in a society that has reached the general

89 D

90 THE ROAD TO SERFDOM

level of wealth which ours has attained, the first kind of security
should not be guaranteed to all without endangering general
freedom. There are difficult questions about the precise standard
which should thus be assured ; there is particularly the import-
ant question whether those who thus rely on the community
should indefinitely enjoy all the same liberties as the rest . 1 An
incautious handling of these questions might well cause serious
and perhaps even dangerous political problems ; but there can
be no doubt that some minimum of food, shelter, and clothing,
sufficient to preserve health and the capacity to work, can be
assured to everybody. Indeed, for a considerable part of the
population of this country this sort of security has long been
achieved.

Nor is there any reason why the state should not assist the
individuals in providing for those common hazards of life
against which, because of their uncertainty, few individuals can
make adequate provision. Where, as in the case of sickness and
accident, neither the desire to avoid such calamities nor the
efforts to overcome their consequences are as a rule weakened by
the provision of assistance, where, in short, we deal with genuinely
insurable risks, the case for the state helping to organise a compre-
hensive system of social insurance is very strong. There are
many points of detail where those wishing to preserve the com-
petitive system and those wishing to supersede it by something
different will disagree on the details of such schemes ; and it is
possible under the name of social insurance to introduce measures
which tend to make competition more or less ineffective. But
there is no incompatibility in principle between the state providing
greater security in this way and the preservation of individual
freedom. To the same category belongs also the increase of
security through the state rendering assistance to the victims of
such “ acts of God ” as earthquakes and floods. Wherever com-
munal action can mitigate disasters against which the individual
can neither attempt to guard himself, nor make provision for the
consequences, such communal action should undoubtedly be taken.

There is, finally, the supremely important problem of combating
general fluctuations of economic activity and the recurrent waves
of large-scale unemployment which accompany them. This is,
of course, one of the gravest and most pressing problems 'of our
time. But, though its solution will require much planning in the
good sense, it does not — or at least need not — require that special
kind of planning which according to its advocates is to replace
the market. Many economists hope indeed that the ultimate

1 There are also serious problems of international relations which arise if
mere citizenship of a country confers the right to a standard of living higher
L than elsewhere, and which ought not to be dismissed too lightly.

SECURITY AND FREEDOM 9 1

remedy may be found in the field of monetary policy, which
would involve nothing incompatible even with nineteenth-century
liberalism. Others, it is true, believe that real success can be
expected only from the skilful timing of public works undertaken
on a very large scale. This might lead to much more serious
restrictions of the competitive sphere, and in experimenting in
this direction we shall have carefully to watch our step if we are
to avoid making all economic activity progressively more depend-
ent on the direction and volume of government expenditure.
But this is neither the only, nor, in my opinion, the most promising
way of meeting the gravest threat to economic security. In any
case, the very necessary efforts to secure protection against these
fluctuations do not lead to the kind of planning which constitutes
such a threat to our freedom.

# * * * #

The planning for security which has such an insidious effect
on liberty is that for security of a different kind. It is planning
designed to protect individuals or groups against diminutions
of their income which although in no way deserved yet in a
competitive society occur daily, against losses imposing severe
hardships having no moral justification yet inseparable from
the competitive system. This demand for security is thus
another form of the demand for a just remuneration, a
remuneration commensurate with the subjective merits and not
with the objective results of a man’s efforts. This kind of
security or justice seems irreconcilable with freedom to choose
one’s employment.

In any system which for the distribution of men between the
different trades and occupations relies on their own choice it is
necessary that the remuneration in these trades should correspond
to their usefulness to the other members of society, even if this
should stand in no relation to subjective merit. Although the
results achieved will often be commensurate with efforts and
intentions, this cannot always be true in any form of society.
It will particularly not be true in the many instances where the
usefulness of some trade or special skill is changed by circum-
stances which could not be foreseen. We all know the tragic
plight of the highly trained man whose hard-learned skill has
suddenly lost its value because of some invention which greatly
benefits the rest of society. The history of the last hundred years
is full of instances of this kind, some of them affecting hundreds
of thousands of people at a time.

That anybody should suffer a great diminution of his income
and bitter disappointment of all his hopes through no fault of
his own, and despite hard work and exceptional skill, undoubtedly^

92 THE ROAD TO SERFDOM

offends our sense of justice. The demands of those who suffer
in this way, for state interference on their behalf to safeguard
their legitimate expectations, are certain to receive popular
sympathy and support. The general approval of these demands
has had the effect that governments everywhere have taken
action, not merely to protect the people so threatened from
severe hardship and privation, but to secure to them the con-
tinued receipt of their former income and to shelter them from
the vicissitudes of the market . 1

Certainty of a given income can, however, not be given to all
if any freedom in the choice of one’s occupation is to be allowed.
And if it is provided for some it becomes a privilege at the expense
of others whose security is thereby necessarily diminished. That
security of an invariable income can be provided for all only by
the abolition of all freedom in the choice of one’s employment is
easily shown. Yet, although such a general guarantee of legiti-
mate expectation is often regarded as the ideal to be aimed at,
it is not a thing which is seriously attempted. What is constantly
being done is to grant this kind of security piecemeal, to this group
and to that, with the result that for those who are left out in the
cold the insecurity constantly increases. No wonder that in
consequence the value attached to the privilege of security
constantly increases, the demand for it becomes more and more
urgent, till in the end no price, not even that of liberty, appears
too high.

* * * # * #

If those whose usefulness is reduced by circumstances which
they could neither foresee nor control were to be protected against
undeserved loss, and those whose usefulness has been increased
in the same way were prevented from making an unmerited gain,
remuneration would soon cease to have any relation to actual
usefulness. It would depend on the views held by some authority
about what a person ought to have done, what he ought to have
foreseen, and how good or bad his intentions were. Such decisions
could not but be to a large extent arbitrary. The application of
this principle would necessarily bring it, about that people doing
the same work would receive different remuneration. The
differences in remuneration would then no longer present an
adequate inducement to people to make the changes which are
socially desirable and it would not even be possible for the
individuals affected to judge whether a particular change is
worth the trouble it causes.

1 Very interesting suggestions of how these hardships might be mitigated with-
in a liberal society, have recently been put forward by Professor W. H. Hutt
( in a book which will repay careful study (Plan for Reconstruction, 1943).

SECURITY AND FREEDOM

93

But if the changes in the distribution of men between different
employments, which are constantly necessary in any society, can
no longer be brought about by pecuniary “ rewards ” and
“ penalties ” (which have no necessary connection with subjective
merit), they must be brought about by direct orders. When
a person’s income is guaranteed he can neither be allowed to stay
in his job merely because he likes it, nor to choose what other
work he would like to do. As it is not he who makes the gain
or suffers the loss dependent on his moving or not moving, the
choice must be made for him by those who control the distribution
of the available income.

The problem of adequate incentives which arises here is
commonly discussed as if it were a problem mainly of the willing-
ness of people to do their best. But this, although important,
is not the whole, nor even the most important, aspect of the
problem. It is not merely that if we want people to give their best
we must make it worth while for them. What is more important
is that if we want to leave them the choice, if they are to be able
to judge what they ought to do, they must be given some readily
intelligible yardstick by which to measure the social importance
of the different occupations Even with the best will in the world
it would be impossible for "anyone intelligently to choose between
various alternatives if the advantages they offered him stood in
no relation to their usefulness to society. To know whether as
the result of a change a man ought to leave a trade and an environ-
ment which he has come to like, and exchange it for another,
it is necessary that the changed relative value of these occupations
to society should find expression in the remunerations they
offer.

The problem is, of course, even more important because in
the world as it is men are, in fact, not likely to give their best
for long periods unless their own interests are directly involved.
At least for great numbers some external pressure is needed if
they are to give their best. The problem of incentives in this
sense is a very real one, both in the sphere of ordinary labour
and in those of the managerial activities. The application of the
engineering technique to a whole nation — and this is what planning
means — “ raises problems of discipline which are hard to solve ”,
as has been well described by an American engineer with great
experience in government planning, who has clearly seen the
problem.

In order to do an engineering job, [he explains], there ought to
be surrounding the work a comparatively large area of unplanned
economic action. There should be a place from which workers can
be drawn, and when a worker is fired he should vanish from the job
and from the pay-roll. In the absence of such a free reservoir

94 THE ROAD TO SERFDOM

discipline cannot be maintained without corporal punishment, as

with slave labour . 1

In the sphere of executive work the problem of sanctions for
negligence arises in a different but no less serious form. It has
been well said that while the last resort of a competitive economy
is the bailiff, the ultimate sanction of a planned economy is the
hangman . 2 The powers the manager of any plant will have to
be given will still be considerable. But no more than in the case
of the worker can the manager’s position and income in a planned
system be made to depend merely on the success or failure of the
work under his direction. As neither the risk nor the gain is his, it
cannot be his personal judgment, but whether he does what he
ought to have done according to some established rule, which must
decide. A mistake he “ ought ” to have avoided is not his own affair,
it is a crime against the community and must be treated as such.
While so long as he keeps to the safe path of objectively ascertain-
able duty he may be surer of his income than the capitalist entre-
preneur, the danger which threatens him in case of real failure
is worse than bankruptcy. He may be economically secure so
long as he satisfies his superiors, but this security is bought at
the price of the safety of freedom and life.

The conflict with which we have to deal is indeed a quite
fundamental one between two irreconcilable types of social
organisation, which, from the most characteristic forms in which
they appear, have often been described as the commercial and the
military type of society. The terms were, perhaps, unfortunate,
because they direct attention to unessentials and make it difficult
to see that we face here a real alternative and that there is no third
possibility. Either both the choice and the risk rest with the
individual or he is relieved of both. The army does indeed in
many ways represent the closest approach familiar to us to the
second type of organisation, where work and worker alike are
allotted by authority and where, if the available means are scanty,
everybody is alike put on short commons. This is the only
system in which the individual can be conceded full economic
security and through the extension of which to the whole of
society it can be achieved for all its members. This security is,
however, inseparable from the restrictions on liberty and the
hierarchical order of military life — it is the security of the barracks.

It is possible, of course, to organise sections of an otherwise
free society on this principle and there is no reason why this form
of life, with its necessary restrictions on individual liberty, should
not be open to those who prefer it. Indeed, some voluntary

1 D. C. Coyle, “ The Twilight of National Pla nnin g,” Harpers’ Magazine,
,.October 1935, p. 558.

s W. Roepke, Die Gescllschaftskrisis der Gegenwart , Zurich, 1942, p. 172.

SECURITY AND FREEDOM 95

labour service on military lines might well be the best form for
the state to provide the certainty of an opportunity for work and
a minimum income for all. That proposals of this sort have in
the past proved so little acceptable is due to the fact that those
who are willing to surrender their freedom for security have
always demanded that if they give up their full freedom it should
also be taken from those not prepared to do so. For this claim
it is difficult to find a justification.

The military type of organisation as we know it gives us, how-
ever, only a very inadequate picture of what it would be like if
it were extended to the whole of society. So long as only a part
of society is organised on military lines, the unfreedom of the
members of the military organisation is mitigated by the fact that
there is still a free sphere to which they can move if the restrictions
become too irksome. If we want to form a picture of what society
would be like if, according to the ideal which has seduced so
many socialists, it was organised as a single great factory, we have
to look to ancient Sparta, or to contemporary Germany, which
after moving for two or three generations in this direction, has
now so nearly reached it.

* # * * *

In a society used to freedom it is unlikely that many people
would be ready deliberately to purchase security at this price.
But the policies which are now followed everywhere, which hand
out the privilege of security, now to this group and now to that,
are nevertheless rapidly creating conditions in which the striving
for security tends to become stronger than the love of freedom.
The reason for this is that with every grant of complete security
to one group the insecurity of the rest necessarily increases. If
you guarantee to some a fixed part of a variable cake, the share
left to the rest is bound to fluctuate proportionally more than the
size of the whole. And the essential element of security which
the competitive system offers, the great variety of opportunities,
is more and more reduced.

Within the market system, security can be granted to particular
groups only by the kind of planning known as restrictionism
(which includes, however, almost all the planning which is actually
practised !). “ Control ”, i.e. limitation of output so that prices

will secure an “ adequate ” return, is the only way in which in
a market economy producers can be guaranteed a certain income.
But this necessarily involves a reduction of opportunities open
to others. If the producer, be he entrepreneur or worker, is to
be protected against underbidding by outsiders, it means that
others who are worse off are precluded from sharing in the rela-
tively greater prosperity of the controlled industries. Every*

g6 THE ROAD TO SERFDOM

restriction on the freedom of entry into a trade reduces the
security of all those outside it. And as the number of those
whose income is secured in this manner increases, the field of
alternative opportunities is restricted which are open to anyone
who suffers a loss of income ; and for those unfavourably affected
by any change the chance of avoiding a fatal diminution of
their income is correspondingly diminished. And if, as has
become increasingly true, in each trade in which conditions
improve, the members are allowed to exclude others in order to
secure to themselves the full gain in the form of higher wages or
profits, those in the trades where demand has fallen have nowhere
to go and every change becomes the cause of large unemployment.
There can be little doubt that it is largely a consequence of the
striving for security by these means in the last decades that
unemployment and thus insecurity for large sections of the
population has so much increased.

In this country such restrictions, especially those affecting the
intermediate strata of society, have assumed important dimensions
only in comparatively recent times, and we have scarcely yet
realised their full consequences. The utter hopelessness of the
position of those who, in a society which has thus grown rigid, are
left outside the range of sheltered occupation, and the magnitude
of the gulf which separates them from the fortunate possessor of
jobs for whom protection against competition has made it unneces-
sary to budge ever so little to make room for those without
can only be appreciated by those who have experienced it. It
is not a question of the fortunate ones giving up their places, but
merely that they should share in the common misfortune by some
reduction of their incomes, or frequently even merely by some
sacrifice of their prospects of improvement. The protection of
their “ standard of life ”, of the “ fair price ”, or the “ professional
income ” to which they regard themselves as entitled, and in the
protection of which they receive the support of the state, precludes
this. In consequence, instead of prices, wages, and individual
incomes, it is now employment and production which have
become subject to violent fluctuations. There has never been
a worse and more cruel exploitation of one class by another than
that of the weaker or less fortunate members of a group of
producers by the well-established which has been made possible
by the “ regulation ” of competition. Few catchwords have done
so much harm as the ideal of a “ stabilisation ” of particular
prices (or wages) which, while securing the income of some,
makes the position of the rest more and more precarious.

Thus, the more we try to provide full security by interfering
with the market system, the greater the insecurity becomes ; and,
c what is worse, the greater becomes the contrast between the

SECURITY AND FREEDOM 97

security of those to whom it is granted as a privilege and the
ever-increasing insecurity of the under-privileged. And the more
security becomes a privilege, and the greater the danger to those
excluded from it, the higher will security be prized. As the
number of the privileged increases and the difference between
their security and the insecurity of the others increases, a com-
pletely new set of social values gradually arises. It is no longer
independence but security which gives rank and status, the
certain right to a pension more than confidence in his making
good which makes a young man eligible for marriage, while
insecurity becomes the dreaded state of the pariah in which those
who in their youth have been refused admission to the haven of
a salaried position remain for life.

# # * # #

The general endeavour to achieve security by restrictive
measures, tolerated or supported by the state, has in the course
of time produced a progressive transformation of society — a trans-
formation in which, as in so many other ways, Germany has led
and the other countries have followed. This development has
been hastened by another effect of socialist teaching, the deliberate
disparagement of all activities involving economic risk and the
moral opprobrium cast on the gains which make risks worth
taking but which only few can win. We cannot blame our young
men when they prefer the safe, salaried position to the risk of
enterprise after they have heard from their earliest youth the
former described as the superior, more unselfish and disinterested
occupation. The younger generation of to-day has grown up in
a world in which in school and press the spirit of commercial
enterprise has been represented as disreputable and the making
of profit as immoral, where to employ a hundred people is repre-
sented as exploitation but to command the same number as
honourable. Older people may regard this as an exaggeration
of the present state of affairs, but the daily experience of the
University teacher leaves little doubt that as a result of anti-
capitalist propaganda values have already altered far in advance
of the change in institutions which has yet taken place in this
country. The question is whether by changing our institutions
to satisfy the new demands, we shall not unwittingly destroy
values which we still rate higher.

The change in the structure of society involved in the victory
of the ideal of security over that of independence cannot be
better illustrated than by a comparison of what ten or twenty
years ago could still be regarded as the English and the German
type of society. However great the influence of the army may
have been in the latter country, it is a grave mistake to ascribe

THE ROAD TO SERFDOM

98

what the Englishman regarded as the “ military ” character of
German society mainly to that influence. The difference went
much deeper than could be explained on that ground, and the
peculiar attributes of German society existed no less in circles
in which the properly military influence was negligible than in
those in which it was strong. It was not so much that at almost
all times a larger part of the German people was organised for
war than was true in other countries, but that the same type
of organisation was employed for so many other purposes, which
gave German society its peculiar character. It was that a larger
part of the civil life of Germany than of any other country was
deliberately organised from the top, that so large a proportion
of her people did not regard themselves as independent but as
appointed functionaries, which gave her social structure its
peculiar character. Germany had, as the Germans themselves
boasted, for long been a Beamtenstaat in which not only in the
Civil Service proper but in almost all spheres of life income and
status were assigned and guaranteed by some authority.

While it is doubtful whether the spirit of freedom can any-
where be extirpated by force, it is not certain that any people
would successfully withstand the process by which it was slowly
smothered in Germany. Where distinction and rank is achieved
almost exclusively by becoming a salaried servant of the state,
where to do one’s assigned duty is regarded as more laudable than
to choose one’s own field of usefulness, where all pursuits that
do not give a recognised place in the official hierarchy or a claim
to a fixed income are regarded as inferior and even somewhat
disreputable, it is too much to expect that many will long prefer
freedom to security. And where the alternative to security in
a dependent position is a most precarious position, in which
one is despised alike for success and for failure, only few will
resist the temptation of safety at the price of freedom. Once
things have gone so far, liberty indeed becomes almost a mockery,
since it can be purchased only by the sacrifice of most of the
good things of this earth. In this state it is little surprising that
more and more people should come to feel that without economic
security liberty is “ not worth having ” and that they are willing
to sacrifice their liberty for security. But it is disquieting to
find Professor Harold Laski in this country employing the very
same argument which has perhaps done more than any other to
induce the German people to sacrifice their liberty . 1

There can be no question that adequate security against severe

1 H. J. Laski, Liberty in the Modern State (Pelican edition 1937, p. 51) :
“ Those who know the normal life of the poor, its haunting sense of impending
disaster, its fitful search for beauty which perpetually eludes, will realise well
enough that, without economic security, liberty is not worth having.”

SECURITY AND FREEDOM

99

privation, and the reduction of the avoidable causes of misdirected
effort and consequent disappointment, will have to be one of the
main goals of policy. But if these endeavours are to be successful
and not to destroy individual freedom, security must be provided
outside the market and competition be left to function un-
obstructed. Some security is essential if freedom is to be pre-
served, because most men are willing to bear the risk which
freedom inevitably involves only so long as that risk is not too
great. But while this is a truth of which we must never lose
sight, nothing is more fatal than the present fashion among
intellectual leaders of extolling security at the expense of freedom.
It is essential that we should re-leam frankly to face the fact that
freedom can only be had at a price and that as individuals we
must be prepared to make severe material sacrifices to preserve
our liberty. If we want to retain this we must regain the
conviction on which the rule of liberty in the Anglo-Saxon
countries has been based and which Benjamin Franklin expressed
in a phrase applicable to us in our lives as individuals no less than
as nations : “ Those who would give up essential liberty to

purchase a little temporary safety deserve neither liberty nor
safety.”

CHAPTER X

WHY THE WORST GET ON TOP

Power tends to corrupt, and absolute power corrupts absolutely.

Lord Acton.

WE must now examine a belief from which many who regard
the advent of totalitarianism as inevitable derive consolation and
which seriously weakens the resistance of many others who would
oppose it with all their might if they fully apprehended its nature.
It is the belief that the most repellent features of the totalitarian
regimes are due to the historical accident that they were estab-
lished by groups of blackguards and thugs. Surely, it is argued,
if in Germany the creation of a totalitarian regime brought the
Streichers and Killingers, the Leys and Heines, the Himmlers
and Heydrichs to power, this may prove the viciousness of the
German character, but not that the rise of such people is the
necessary consequence of a totalitarian system. Why should it
not be possible that the same sort of system, if it be necessary to
achieve important ends, be run by decent people for the good
of the community as a whole ?

We must not deceive ourselves into believing that all good
people must be democrats or will necessarily wish to have a share
in the government. Many, no doubt, would rather entrust it to
somebody whom they think more competent. Although this
might be unwise, there is nothing bad or dishonourable in approv-
ing a dictatorship of the good. Totalitarianism, we can already
hear it argued, is a powerful system alike for good and evil, and
the purpose for which it will be used depends entirely on the
dictators. And those who think that it is not the system which
we need fear, but the danger that it might be run by bad men,
might even be tempted to forestal this danger by seeing that it
is established in time by good men.

No doubt an English “ fascist ” system would greatly differ
from the Italian or German models ; no doubt if the transition
were effected without violence, we might expect to get a better
type of leader. And if I had to live under a fascist system I
have no doubt that I would rather live under one run by English-
men than under one run by anybody else. Yet all this does
not mean that, judged on our present standards, a British
fascist system would in the end prove so very different or much
less intolerable than its prototypes. There are strong reasons
for believing that what to us appear the worst features of the
existing totalitarian systems are not accidental by-products, but

ioo

WHY THE WORST GET ON TOP IOI

phenomena which totalitarianism is certain sooner or later to
produce. Just as the democratic statesman who sets out to plan
economic life will soon be confronted with the alternative of
either assuming dictatorial powers or abandoning his plan's, so
the totalitarian dictator would soon have to choose between dis-
regard of ordinary morals and failure. It is for this reason that
the unscrupulous and uninhibited are likely to be more successful
in a society tending towards totalitarianism. Who does not see
this has not yet grasped the full width of the gulf which separates
totalitarianism from a liberal regime, the utter difference between
the whole moral atmosphere under collectivism and the essentially
individualist Western civilisation.

The “ moral basis of collectivism ” has, of course, been much
debated in the past ; but what concerns us here is not its moral
basis but its moral results. The usual discussions of the ethical
aspects of collectivism refer to the question whether collectivism
is demanded by existing moral convictions ; or what moral con-
victions would be required if collectivism is to produce the hoped-
for results. Our question, however, is what moral views will be
produced by a collectivist organisation of society, or what views
are likely to rule it. The interaction between morals and insti-
tutions may well have the effect that the ethics produced by
collectivism will be altogether different from the moral ideals
that lead to the demand for collectivism. While we are apt to
think that, since the desire for a collectivist system springs from
high moral motives, such a system must be the breeding ground
for the highest virtues, there is, in fact, no reason why any
system should necessarily enhance those attitudes which serve
the purpose for which it was designed. The ruling moral views
will depend partly on the qualities that will lead individuals to
success in a collectivist or totalitarian system, and partly on
the requirements of the totalitarian machinery.

# # # * #

We must here return for a moment to the position which
precedes the suppression of democratic institutions and the
creation of a totalitarian regime. In this stage it is the general
demand for quick and determined government action that is
the dominating element in the situation, dissatisfaction with the
slow and cumbersome course of democratic procedure which
makes action for action’s sake the goal. It is then the man or the
party who seems strong and resolute enough “ to get things
done ” who exercises the greatest appeal. “ Strong ” in this
sense means not merely a numerical majority — it is the ineffective-
ness of parliamentary majorities with which people are dissatisfied.
What they will seek is somebody with such solid support as to *

102

THE ROAD TO SERFDOM

inspire confidence that he can carry out whatever he wants. It
is here that the new type of party, organised on military lines,
comes in.

In the Central European countries the socialist parties had
familiarised the masses with political organisations of a semi-
military character designed to absorb as much as possible of the
private life of the members. All that was wanted to give one
group overwhelming power was to carry the same principle
somewhat further, to seek strength not in the assured votes of
huge numbers at occasional elections, but in the absolute and
unreserved support of a smaller but more thoroughly organised
body. The chance of imposing a totalitarian regime on a whole
people depends on the leader first collecting round him a group
which is prepared voluntarily to submit to that totalitarian
discipline which they are to impose by force' upon the rest.

Although the socialist parties had the strength to get anything
if they had cared to use force, they were reluctant to do so.

. They had, without knowing it, set themselves a task which
only the ruthless, ready to disregard the barriers of accepted
morals, can execute.

That socialism can be put into practice only by methods which
most socialists disapprove is, of course, a lesson learnt by many
social reformers in the past. The old socialist parties were
inhibited by their democratic ideals, they did not possess the
ruthlessness required for the performance of their chosen task.
It is characteristic that both in Germany and Italy the success of
Fascism was preceded by the refusal of the socialist parties to
take over the responsibilities of government. They were un-
willing wholeheartedly to employ the methods to which they had
pointed the way. They still hoped for the miracle of a majority
agreeing on a particular plan for the organisation of the whole
of society ; others had already learnt the lesson that in a planned
society the question can no longer be on what a majority of the
people agree, but what is the largest single group whose members
agree sufficiently to make unified direction of all affairs possible ;
or, if no such group large enough to enforce its views exists, how
it can be created and who will succeed in creating it.

There are three main reasons why such a numerous and strong
group with fairly homogeneous views is not likely to be formed
by the best but rather by the worst elements of any society. By
our standards the principles on which such a group would be
selected will be almost entirely negative.

In the first instance, it is probably true that in general the higher
the education and intelligence of individuals becomes, the more
their views and tastes are differentiated and the less likely they
are to agree on a particular hierarchy of values. It is a corollary

WHY THE WORST GET ON TOP

IO3

of this that if we wish to find a high degree of uniformity and
similarity of outlook, we have to descend to the regions of lower
moral and intellectual standards where the more primitive and
“ common ” instincts and tastes prevail. This does not mean
that the majority of people have low moral standards ; it merely
means that the largest group of people whose values are very
similar are the people with low standards. It is, as it were, the
lowest common denominator which unites the largest number of
people. If a numerous group is needed, strong enough to
impose their views on the values of life on all the rest, it will never
be those with highly differentiated and developed tastes — it will
be those who form the “ mass ” in the derogatory sense of the term,
the least original and independent, who will be able to put the
weight of their numbers behind their particular ideals.

If, however, a potential dictator had to rely entirely on those
whose uncomplicated and primitive instincts happen to be very
similar, their number would scarcely give sufficient weight to
their endeavours. He will have to increase their numbers by
converting more to the same simple creed.

Here comes in the second negative principle of selection :
he will be able to obtain the support of all the docile and
gullible, who have no strong convictions of their own but are
prepared to accept a ready-made system of values if it is only
drummed into their ears sufficiently loudly and frequently. It
will be those whose vague and imperfectly formed ideas are easily
swayed and whose passions and emotions are readily aroused
who will thus swell the ranks of the totalitarian party.

It is in connection with the deliberate effort of the skilful
demagogue to weld together a closely coherent and homogeneous
body of supporters that the third and perhaps most important
negative element of selection enters. It seems to be almost a
law of human nature that it is easier for people to agree on a
negative programme, on the hatred of an enemy, on the envy of
those better off, than on any positive task. The contrast between
the “ we ” and the “ they ”, the common fight against those
outside the group, seems to be an essential ingredient in any creed
which will solidly knit together a group for common action. It
is consequently always employed by those who seek, not merely
support of a policy, but the unreserved allegiance of huge masses.
From their point of view it has the great advantage of leaving
them greater freedom of action than almost any positive pro-
gramme. The enemy, whether he be internal like the “ Jew ”
or the “ Kulak ”, or external, seems to be an indispensable
requisite in the armoury of a totalitarian leader.

That in Germany it was the Jew who became the enemy till
his place was taken by the “ plutocracies ” was no less a result «

THE ROAD TO SERFDOM

IO4

of the anti-capitalist resentment on which the whole movement
was based than the selection of the Kulak in Russia. In Germany
and Austria the Jew had come to be regarded as the representative
of capitalism because a traditional dislike of large classes of the
population for commercial pursuits had left these more readily
accessible to a group that was practically excluded from the more
highly esteemed occupations. It is the old story of the alien race
being admitted only to the less respected trades and then being
hated still more for practising them. The fact that German
anti-semitism and anti-capitalism spring from the same root is
of great importance for the understanding of what has happened
there, but this is rarely grasped by foreign observers.

# # # # #

To treat the universal tendency of collectivist policy to become
nationalistic as due entirely to the necessity for securing
unhesitating support would be to neglect another and no less
important factor. It may indeed be questioned whether anybody
can realistically conceive of a collectivist programme other than
in the service of a limited group, whether collectivism can exist
in any other form than that of some kind of particularism, be it
nationalism, racialism, or class-ism. The belief in the com-
munity of aims and interests with fellow-men seems to presuppose
a greater degree of similarity of outlook and thought than exists
between men merely as human beings. If the other members of
one’s group cannot all be personally known, they must at least
be of the same kind as those around us, think and talk in the same
way and about the same kind of things, in order that we may
identify ourselves with them. Collectivism on a world scale
seems to be unthinkable — except in the service of a small ruling
elite. It would certainly raise not only technical but above all
moral problems which none of our socialists are willing to face.
If the English proletarian is entitled to an equal share of the
income now derived from England’s capital resources, and of the
control of their use, because they are the result of exploitation,
so on the same principle all the Indians would be entitled not
only to the income from but also to the use of a proportional
share of the British capital. But what socialists seriously con-
template the equal division of existing capital resources among
the people of the world ? They all regard the capital as belonging
not to humanity but to the nation — though even within the
nation few would dare to advocate that the richer regions
should be deprived of some of “ their ” capital equipment in
order to help the poorer regions. What socialists proclaim as a
duty towards the fellow members of the existing states, they are
■ not prepared to grant to the foreigner. From a consistent

WHY THE WORST GET ON TOP 105

collectivist point of view the claims of the “ Have-Not ” nations
for a new division of the world are entirely justified — though, if
consistently applied, those who demand it most loudly would lose
by it almost as much as the richest nations. They are, therefore,
careful not to base their claims on any equalitarian principles but
on their pretended superior capacity to organise other peoples.

One of the inherent contradictions of the collectivist philo-
sophy is, that while basing itself on the humanistic morals which
individualism has developed, it is practicable only within a rela-
tively small group. That socialism so long as it remains theo-
retical, is internationalist, while as soon as it is put into practice,
whether in Russia or in Germany, it becomes violently nationalist,
is one of the reasons why “ liberal socialism ” as most people in the
Western world imagine it is purely theoretical, while the practice
of socialism is everywhere totalitarian . 1 Collectivism has no room
for the wide humanitarianism of liberalism but only for the narrow
particularism of the totalitarian.

If the “ community ” or the state are prior to the individual,
if they have ends of their own independent of and superior to
those of the individuals, only those individuals who work for the
same ends can be regarded as members of the community. It is
a necessary consequence of this view that a person is respected
only as a member of the group, that is, only if and in so far as he
works for the recognised common ends, and that he derives his
whole dignity only from this membership and not merely from
being man. Indeed, the very concepts of humanity and therefore
of any form of internationalism are entirely products of the
individualist view of man, and there can be no place for them
in a collectivist system of thought . 2

Apart from the basic fact that the community of collectivism
can extend only as far as the unity of purpose of the individuals
exists or can he created, several contributory factors strengthen
the tendency of collectivism to become particularist and exclusive.
Of these one of the most important is that the desire of the
individual to identify himself with a group is very frequently
the result of a feeling of inferiority, and that therefore his want
will only be satisfied if membership of the group confers some
superiority over outsiders. Sometimes, it seems, the very fact
that these violent instincts which the individual knows he must

1 Cf. now the instructive discussion in F. Borkenau, Socialism, National or
International ?, 1942.

a It is entirely in the spirit of collectivism when Nietzsche makes his Zara-
thustra say :

“ A thousand goals have existed hitherto, for a thousand people existed.
But the fetter for the thousand necks is still lacking, the one goal is still lacking.
Humanity has no goal yet.

“ But tell me, I pray, my brethren : if the goal be lacking to humanity ia»
not humanity itself lacking ? ”

106 THE ROAD TO SERFDOM

curb within the group can be given a free range in the collective
action towards the outsider, becomes a further inducement for
merging personality in that of the group. There is a profound
truth expressed in the title of R. Niebuhr’s Moral Man and
Immoral Society — however little we can follow him in the
conclusions he draws from his thesis. There is indeed, as he
says elsewhere, “ an increasing tendency among modern men
to imagine themselves ethical because they have delegated
their vices to larger and larger groups.” 1 To act on behalf
of a group seems to free people of many of the moral restraints
which control their behaviour as individuals within the group.

The definitely antagonistic attitude which most planners
take towards internationalism is further explained by the fact
that in the existing world all outside contacts of a group are
obstacles to their effectively planning the sphere in which they
can attempt it. It is therefore no accident that, as the editor of
one of the most comprehensive collective studies on planning has
discovered to his chagrin, “ most * planners ’ are militant
nationalists ”. 2

The nationalist and imperialist propensities of socialist planners,
much more common than is generally recognised, are not always
as flagrant as, for example, in the case of the Webbs and some
of the other early Fabians, with whom enthusiasm for planning
was characteristically combined with the veneration for the
large and powerful political units and a contempt for the small
state. The historian Elie Halevy, speaking of the Webbs when
he first knew them forty years ago, records that

their socialism was profoundly anti-liberal. They did not hate the
Tories, indeed they were extraordinarily lenient to them, but they
had no mercy for Gladstonian Liberalism. It was the time of the
Boer War and both the advanced liberals and the men who were
beginning to form the Labour Party had generously sided with the
Boers against British Imperialism, in the name of freedom and
humanity. But the two Webbs and their friend, Bernard Shaw,
stood apart. They were ostentatiously imperialistic. The inde-
pendence of small nations might mean something to the liberal
individualist. It meant nothing to collectivists like themselves.
I can still hear Sidney Webb explaining to me that the future
belonged to the great administrative nations, where the officials
govern and the police keep order.

And elsewhere Halevy quotes Bernard Shaw arguing, about the
same time, that “ the world is to the big and powerful states by

1 Quoted from an article of Dr. Niebuhr’s by E. H. Carr, The Twenty Years'
Crisis, 1941, p. 203.

( 1 Findlay MacKenzie (ed.), Planned Society, Yesterday, Today, Tomorrow :
A Symposium, 1937, p. xx.

WHY THE WORST GET ON TOP 107

necessity ; and the little ones must come within their border or
be crushed out of existence ”. 1

I have quoted at length these passages, which would not
surprise one in a description of the German ancestors of
national socialism, because they provide so characteristic an
example of that glorification of power which easily leads from
socialism to nationalism and which profoundly affects the ethical
views of all collectivists. So far as the rights of small nations
are concerned, Marx and Engels were little better than most other
consistent collectivists, and the views they occasionally expressed
about Czechs or Poles resemble those of contemporary National
Socialists. 2

* * # * •

While to the great individualist social philosophers of the nine-
teenth century, to a Lord Acton or Jacob Burckhardt, down to
contemporary socialists, like Bertrand Russell, who have inherited
the liberal tradition, power itself has always appeared the arch-
evil, to the strict collectivist it is a goal in itself. It is not only,
as Russell has so well described, that the desire to organise social
life according to a unitary plan itself springs largely from a desire
for power. 3 It is even more the outcome of the fact that in
order to achieve their end collectivists must create power —
power over men wielded by other men — of a magnitude never
before known, and that their success will depend on the extent
to which they achieve such power.

This remains true even though many liberal socialists are guided
in their endeavours by the tragic illusion that by depriving private
individuals of the power they possess in an individualist system,
and by transferring this power to society, they can thereby
extinguish power. What all those who argue in this manner over-
look is that by concentrating power so that it can be used in the
service of a single plan, it is not merely transferred but infinitely
heightened ; that by uniting in the hands of some single body
power formerly exercised independently by many, an amount of
power is created infinitely greater than any that existed before,
so much more far-reaching as almost to be different in kind. It
is entirely fallacious when it is sometimes argued that the great
power exercised by a Central Planning Board would be “ no
greater than the power collectively exercised by private boards
of directors ”. 4 There is, in a competitive society, nobody who

1 E. Hal^vy, L'Ere des Tyrannies , Paris, 1938, p. 217, and History of the
Enghsh People, Epilogue, vol. I, pp. 105-6.

1 Cf. K. Marx, Revolution and Counter-revolution, and Engels’ letter to Marx,
May 23, 1851.

'Bertrand Russell, The Scientific Outlook, 1931, p. 211.

4 B. E. Lippincott, in his Introduction to O. Lange and F. M. Taylor, Otu
the Economic Theory of Socialism, Minneapolis, 1938, p. 35.

108 THE ROAD TO SERFDOM

can exercise even a fraction of the power which a socialist planning
board would possess, and if nobody can consciously use the
power, it is just an abuse of words to assert that it rests with all
the capitalists put together . 1 It is merely a play upon words
to speak of the “ power collectively exercised by private boards
of directors ” so long as they do not combine to concerted action
— which would, of course, mean the end of competition and the
creation of a planned economy. To split or decentralise power
is necessarily to reduce the absolute amount of power and the
competitive system is the only system designed to minimise by
decentralisation the power exercised by man over man.

We have seen before how the separation of economic and
political aims is an essential guarantee of individual freedom and
how it is consequently attacked by all collectivists. To this we
must now add that the “ substitution of political for economic
power ” now so often demanded means necessarily the substitu-
tion of power from which there is no escape for a power which is
always limited. What is called economic power, while it can be
an instrument of coercion, is in the hands of private individuals
never exclusive or complete power, never power over the whole
life of a person. But centralised as an instrument of political
power it creates a degree of dependence scarcely distinguishable
from slavery.

*****

From the two central features of every collectivist system, the
need for a commonly accepted system of ends of the group, and
the all-overriding desire to give to the group the maximum of
power to achieve these ends, grows a definite system of morals,
which on some points coincides and on others violently contrasts
with ours — but differs from it in one point which makes it doubtful
whether we can call it morals : that it does not leave the indi-
vidual conscience free to apply its own rules and does not even
know any general rules which the individual is required or allowed
to observe in all circumstances. This makes collectivist morals
so different from what we have known as morals that we find it
difficult to discover, any principle in them, which they never-
theless possess.

The difference of principle is very much the same as that which
we have already considered in connection with the Rule of Law.

1 We must not allow ourselves to be deceived by the fact that the word
power, apart from the sense in which it is used with respect to human beings,
is also used in an impersonal (or rather anthropomorphic) sense for any deter-
mining cause. Of course there will always be something that determines
everything that happens, and in this sense the amount of power existing must
always be the same. But this is not true of the power consciously wielded by
human beings.

WHY THE WORST GET ON TOP 109

Like formal law the rules of individualist ethics, however un-
precise they may be in many respects, are general and absolute ;
they prescribe or prohibit a general type of action irrespective of
whether in the particular instance the ultimate purpose is good
or bad. To cheat or steal, to torture or betray a confidence, is
held to be bad, irrespective of whether or not in the particular
instance any harm follows from it. Neither the fact that in a
given instance nobody may be the worse for it, nor any high
purpose for which such an act may have been committed, can
alter the fact that it is bad. Though we may sometimes be forced
to choose between different evils they remain evils. The principle
that the end justifies the means is in individualist ethics regarded
as the denial of all morals. In collectivist ethics it becomes
necessarily the supreme rule ; there is literally nothing which
the consistent collectivist must not be prepared to do if it serves
“ the good of the whole ”, because the “ good of the whole ”
is to him the only criterion of what ought to be done. The
raison d’etat, in which collectivist ethics has found its most explicit
formulation, knows no other limit than that set by expediency
— the suitability of the particular act for the end in view. And
what the raison d’etat affirms with respect to the relations between
different countries applies equally to the relations between
different individuals within the collectivist state. There can be
no limit to what its citizen must be prepared to do, no act
which his conscience must prevent him from committing, if it
is necessary for an end which the community has set itself or which
his superiors order him to achieve.

# * * * *

The absence of absolute formal rules in collectivist ethics does
not, of course, mean that there are not some useful habits of the
individuals which a collectivist community will encourage, and
others which it will discourage. Quite the reverse ; it will
take a much greater interest in the individual’s habits of life
than an individualist community. To be a useful member of a
collectivist society requires very definite qualities which must
be strengthened by constant practice. The reason why we
designate these qualities as “ useful habits ” and can hardly
describe them as moral virtues is that the individual could never
be allowed to put these rules above any definite orders, or to let
them become an obstacle to the achievement of any of the par-
ticular aims of his community. They only serve, as it were, to
fill any gaps which direct orders or the designation of particular
aims may leave, but they can never justify a conflict with the
will of the authority.

The differences between the virtues which will continue to bq,

no

THE ROAD TO SERFDOM

esteemed under a collectivist system and those which will dis-
appear is well illustrated by a comparison of the virtues which
even their worst enemies admit the Germans, or rather the
“ typical Prussian ”, to possess, and those of which they are
commonly thought lacking and in which the English people,
with some justification, used to pride themselves as excelling.
Few people will deny that the Germans on the whole are
industrious and disciplined, thorough and energetic to the
degree of ruthlessness, conscientious and single-minded in any
tasks they undertake, that they possess a strong sense of order,
duty, and strict obedience to authority, and that they often show
great readiness to make personal sacrifices and great courage in
physical danger. All these make the German an efficient instru-
ment in carrying out an assigned task, and they have accordingly
been carefully nurtured in the old Prussian state and the new
Prussian-dominated Reich. What the “ typical German ” is often
thought to lack are the individualist virtues of tolerance and
respect for other individuals and their opinions, of independence
of mind and that uprightness of character and readiness to defend
one’s own convictions against a superior which the Germans them-
selves, usually conscious that they lack it, call Zivilcourage, of
consideration for the weak and infirm, and of that healthy contempt
and dislike of power which only an old tradition of personal liberty
creates. Deficient they seem also in most of those little yet so
important qualities which facilitate the intercourse between men
in a free society : kindliness and a sense of humour, personal
modesty, and respect for the privacy and belief in the good
intentions of one’s neighbour.

After what we have already said it will not cause surprise that
these individualist virtues are at the same time eminently social
virtues, virtues which smooth social contacts and which make con-
trol from above less necessary and at the same time more difficult.
They are virtues which flourish wherever the individualist or
commercial type of society has prevailed and which are missing
according as the collectivist or military type of society predom-
inates — a difference which is, or was, as noticeable between the
various regions of Germany as it has now become of the views
which rule in Germany and those characteristic of the West.
Till recently, at least, in those parts of Germany which have
been longest exposed to the civilising forces of commerce, the
old commercial towns of the south and west and the Hanse towns,
the general moral concepts were probably much more akin to
those of the Western people than to those which have now become
dominant all over Germany.

It would, however, be highly unjust to regard the masses of
Jhe totalitarian people as devoid of moral fervor because they

WHY THE WORST GET ON TOP III

give unstinted support to a system which to us seems a denial
of most moral values. For the great majority of them the opposite
is probably true : the intensity of the moral emotions behind a
movement like that of National-Socialism or communism can
probably be compared only to those of the great religious move-
ments of history. Once you admit that the individual is merely
a means to serve the ends of the higher entity called society or
the nation, most of those features of totalitarian regimes which
horrify us follow of necessity. From the collectivist standpoint
intolerance and brutal suppression of dissent, the complete dis-
regard of the life and happiness of the individual, are essential
and unavoidable consequences of this basic premise, and the
collectivist can admit this and at the same time claim that his
system is superior to one in which the “ selfish ” interests of the
individual are allowed to obstruct the full realisation of the ends
the community pursues. When German philosophers again and
again represent the striving for personal happiness as itself
immoral and only the fulfilment of an imposed duty as praise-
worthy, they are perfectly sincere, however difficult this may be
to understand for those who have been brought up in a different
tradition.

Where there is one common all-overriding end there is no
room for any general morals or rules. To a limited extent we
ourselves experience this in wartime. But even war and the
greatest peril had led in this country only to a very moderate
approach to totalitarianism, very little setting aside of all other
values in the service of a single purpose. But where a few
specific ends dominate the whole of society, it is inevitable that
occasionally cruelty may become a duty, that acts which revolt
all our feeling, such as the shooting of hostages or the killing of
the old or sick, should be treated as mere matters of expediency,
that the compulsory uprooting and transportation of hundreds
of thousands should become an instrument of policy approved
by almost everybody except the victims, or that suggestions like
that of a “ conscription of woman for breeding purposes ” can
be Seriously contemplated. There is always in the eyes of the
collectivist a greater goal which these acts serve and which to
him justifies them because the pursuit of the common end of
society can know no limits in any rights or values of any
individual.

But while for the mass of the citizens of the totalitarian state
it is often unselfish devotion to an ideal, although one that is
repellent to us, which makes them approve and even perform
such deeds, this cannot be pleaded for those who guide its policy.
To be a useful assistant in the running of a totalitarian state it
is not enough that a man should be prepared to accept specious

1X2

THE ROAD TO SERFDOM

justification of vile deeds, he must himself be prepared actively
to break every moral rule he has ever known if this seems necessary
to achieve the end set for him. Since it is the supreme leader
who alone determines the ends, his instruments must have no
moral convictions of their own. They must, above all, be
unreservedly committed to the person of the leader ; but next
to this the most important thing is that they should be completely
unprincipled and literally capable of everything. They must
have no ideals of their own which they want to realise, no ideas
about right or wrong which might interfere with the intentions
of the leader. There is thus in the positions of power little to
attract those who hold moral beliefs of the kind which in the
past have guided the European peoples, little which could com-
pensate for the distastefulness of many of the particular tasks,
and little opportunity to gratify any more idealistic desires, to
recompense for the undeniable risk, the sacrifice of most of the
pleasures of private life and of personal independence which the
posts of great responsibility involve. The only tastes which are
satisfied are the taste 'for power as such, the pleasure of being
obeyed and of being part of a well-functioning and immensely
powerful machine to which everything else must give way.

Yet while there is little that is likely to induce men who are
good by our standards to aspire to leading positions in the total-
itarian machine, and much to deter them, there will be special
opportunities for the ruthless and unscrupulous. There will be
jobs to be done about the badness of which taken by themselves
nobody has any doubt, but which have to be done in the service '
of some higher end, and which have to be executed with the
same expertness and efficiency as any others. And as there will
be need for actions which are bad in themselves, and which all
those still influenced by traditional morals will be reluctant to
perform, the readiness to do bad things becomes a path to pro-
motion and power. The positions in a totalitarian society in
which it is necessary to practice cruelty and intimidation, delib-
erate deception and spying, are numerous. Neither the Gestapo
nor the administration of a concentration camp, neither the
Ministry of Propaganda nor the SA or SS (or their Italian or
Russian counterparts) are suitable places for the exercise of
humanitarian feelings. Yet it is through positions like these that
the road to the highest positions in the totalitarian state leads.
It is only too true when a distinguished American economist
concludes from a similar brief enumeration of the duties of the
authorities of a collectivist state that

they would have to do these things whether they wanted to or not :

and the probability of the people in power being individuals who
- would dislike the possession and exercise of power is on a level with

WHY THE WORST GET ON TOP 113

the probability that an extremely tender-hearted person would get

the job of whipping-master in a slave plantation . 1

We cannot, however, exhaust this subject here. The problem
of the selection of the leaders is closely bound up with the wide
problem of selection according to the opinions held, or rather
according to the readiness with which a person conforms to an
ever-changing set of doctrines. And this leads us to one of the
most characteristic moral features of totalitarianism, its relation
to, and its effect on, all the virtues falling under the general
heading of truthfulness. This is so big a subject that it requires
a separate chapter.

1 Professor F. H. Knight in The Journal of Political Economy, December
1938, p. 869.

CHAPTER XI

THE END OF TRUTH

It is significant that the nationalisation of thought has
proceeded everywhere pari passu with the nationalisation of
industry.

E. H. Carr.

THE most effective way of making everybody serve the single
system of ends towards which the social plan is directed is to
make everybody believe in those ends. To make a totalitarian
system function efficiently it is not enough that everybody should
be forced to work for the same ends. It is essential that the
people should come to regard them as their own ends. Although
the beliefs must be chosen for the people and imposed upon them,
they must become their beliefs, a generally accepted creed which
makes the individuals as far as possible act spontaneously in the
way the planner wants. If the feeling of oppression in totalitarian-
countries is in general much less acute than most people in liberal
countries imagine, this is because the totalitarian governments
succeed to a high degree in making people think as they want
them to.

This is, of course, brought about by the various forms of
propaganda. Its technique is now so familiar that we need say
little about it. The only point that needs to be stressed is that
neither propaganda in itself, nor the techniques employed, are
peculiar to totalitarianism, and that what so completely changes
its nature and effect in a totalitarian state is that all propaganda
serves the same goal, that all the instruments of propaganda are
co-ordinated to influence the individuals in the same direction
and to produce the characteristic Gleichschaltung of all minds.
As a result, the effect of propaganda in totalitarian countries is
different not only in magnitude but in kind from that of the
propaganda made for different ends by independent and competing
agencies. If all the sources of current information are effectively
under one single control, it is no longer a question of merely
persuading the people of this or that. The skilful propagandist
then has power to mould their minds in any direction he chooses
and even the most intelligent and independent people cannot
entirely escape that influence if they are long isolated from all
other sources of information.

While in the totalitarian states this status of propaganda gives
it a unique power over the minds of the, people, the peculiar moral
effects arise not from the technique but from the object and scope

114

THE END OF TRUTH

TI 5

of totalitarian propaganda. If it could be confined to indoctrinat-
ing the people with the whole system of values towards which
the social effort is directed, propaganda would represent merely
a particular manifestation of the characteristic features of col-
lectivist morals which we have already considered. If its object
were merely to teach the people a definite and comprehensive
moral code, the problem would be solely whether this moral code
is good or bad. We have seen that the moral code of a totalitarian
society is not likely to appeal to us, that even the striving for
equality by means of a directed economy can only result in an
officially enforced inequality — an authoritarian determination of
the status of each individual in the new hierarchical order ; that
most of the humanitarian elements of our morals, the respect
for human life, for the weak and for the individual generally,
will disappear. However repellent this may be to most people,
and though it involves a change in moral standards, it is not
necessarily entirely anti-moral. Some features of such a system
may even appeal to the sternest moralists of a conservative
tint and seem to them preferable to the softer standards of a
liberal society.

The moral consequences of totalitarian propaganda which we
must now consider are, however, of an even more profound kind.
They are destructive of all morals because they undermine one
of the foundations of all morals, the sense of and the respect for
truth. From the nature of its task, totalitarian propaganda cannot
confine itself to values, to questions of opinion and moral convic-
tions in which the individual always , will conform more or less
to the views ruling his community, but must extend to questions
of fact where human intelligence is involved in a different way.
This is so, firstly, because in order to induce people to accept the
official values, these must be justified, or shown to be connected
with the values already held by the people, which usually will
involve assertions about causal connections between means and
ends ; and, secondly, because the distinction between ends and
means, between the goal aimed at and the measures taken to
achieve it, is in fact never so clear-cut and definite as any general
discussion of these problems is apt to suggest ; and because,
therefore, people must be brought to agree not only with the
ultimate aims but also with the views about the facts and possi-
bilities on which the particular measures are based.

# # # # *

We have seen that agreement on that complete ethical code,
that all-comprehensive system of values which is implicit in an
economic plan, does not exist in a free society but would have
to be created. But we must not assume that the planner will

Il6 THE ROAD TO SERFDOM

approach his task aware of that need, or that, even if he were
aware of it, it would be possible to create such a comprehen-
sive code in advance. He only finds out about the conflicts
between different needs as he goes along, and has to make his
decisions as the necessity arises. The code of values guiding his
decisions does not exist in abstracto before the decisions have
to be made, it has to be created with the particular decisions.
We have also seen how this inability to separate the general
problem of values from the particular decisions makes it
impossible that a democratic body, while unable to decide
the technical details of a plan, should yet determine the values
guiding it.

And while the planning authority will constantly have to decide
issues on merits about which there exist no definite moral rules,
it will have to justify its decisions to the people — or, at least, have
somehow to make the people believe that they are the right
decisions. Although those responsible for a decision may have
been guided by no more than prejudice, some guiding principle
will have to be stated publicly if the community is not merely
passively to submit but actively to support the measure. The
need to rationalise the likes and dislikes which, for lack of anything
else, must guide the planner in many of his decisions, and the
necessity of stating his reasons in a form in which they will appeal
to as many people as possible, will force him to construct theories,
i.e. assertions about the connections between facts, which then
become an integral part of the governing doctrine. This process
of creating a “ myth ” to justify his action need not be conscious.
The totalitarian leader may be guided merely by an instinctive
dislike of the state of things he has found and a desire to create,
a new hierarchical order which conforms better to his conception
of merit, he may merely know that he dislikes the Jews who
seemed to be so successful in an order which did not provide
a satisfactory place for him, and that he loves and admires the
tall blond man, the “ aristocratic ” figure of the novels of his
youth. So he will readily embrace theories . which seem to
provide a rational justification for the prejudices which he shares
with many of his fellows. Thus a pseudo-scientific theory
becomes part of the official creed which to a greater or lesser
degree directs everybody’s action. Or the widespread dislike of
the industrial civilisation and a romantic yearning for country
life, together with a (probably erroneous) idea about the special
value of country people as soldiers, provides the basis for another
myth : Blut und Boden (blood and soil), expresses not merely
ultimate values but a whole host of beliefs about cause and effect
which once they have become ideals directing the activity of the
whole community must not be questioned.

THE END OF TRUTH

117

The need for such official doctrines as an instrument of directing
and rallying the efforts of the people has been clearly foreseen
by the various theoreticians of the totalitarian system. Plato’s
“ noble lies ” and Sorel’s “ myths ” serve the same purpose as
the racial doctrine of the Nazis or the theory of the corporative
state of Mussolini. They are all necessarily based on particular
views about facts which are then elaborated into scientific theories
in order to justify a preconceived opinion.

* * * # #

The most effective way of making people accept the validity
of the values they are to serve is to persuade them that they are
really the same as those which they, or at least the best among
them, have always held, but which were not properly understood
or recognised before. The people are made to transfer their
allegiance from the old gods to the new under the pretence that
the new gods really are what their sound instinct had always told
them but what before they had only dimly seen. And the most
efficient technique to this end is to use the old words but change
their meaning. Few traits of totalitarian regimes are at the same
time so confusing to the superficial observer and yet so character-
istic of the whole intellectual climate as the complete perversion
of language, the change of meaning of the words by which the
ideals of the new regimes are expressed.

The worst sufferer in this respect is, of course, the word liberty.
It is a word used as freely in totalitarian states as elsewhere.
Indeed it could almost be said — and it should serve as a warning
to us to be on our guard against all the tempters who promise
us New Liberties for Old 1 — that wherever liberty as we understand
it has been destroyed, this has almost always been done in the
name of some new freedom promised to the people. Even
among us we have “ planners for freedom ” who promise us a
“ collective freedom for the group ”, the nature of which may
be gathered from the fact that its advocate finds it necessary to
assure us that “ naturally the advent of planned freedom does not
mean that all [«'c] earlier forms of freedom must be abolished ”.
Dr. Karl Mannheim, from whose work l 2 these sentences are taken,
at least warns us that “ a conception of freedom modelled on the
preceding age is an obstacle to any real understanding of the
problem ”. But his use of the word freedom is as misleading
as it is in the mouth of totalitarian politicians. Like their freedom
the “ collective freedom ” he offers us is not the freedom of the
members of society but the unlimited freedom of the planner to

l jThis is the title of a recent work by the American historian C. L. Becker.

‘‘ Man and Society in an Age of Reconstruction , p. 377.

1X8 THE ROAD TO SERFDOM

do with society what he pleases . 1 It is the confusion of freedom
with power carried to the extreme.

In this particular case the perversion of the meaning of the word
has, of course, been well prepared by a long line of German
philosophers, and not least by many of the theoreticians of
socialism. But freedom or liberty are by no means the only
words whose meaning has been changed into their opposites to
make them serve as instruments of totalitarian propaganda. We
have already seen how the same happens to justice and law, right
and equality. The list could be extended till it included almost
all moral and political terms in general use.

If one has not oneself experienced this process, it is difficult
to appreciate the magnitude of this change of the meaning of
words, the confusion which it causes, and the barriers to any
rational discussion which it creates. It has to be seen to be
understood how, if one of two brothers embraces the new faith,
after a short while he appears to speak a different language which
makes any real communication between them impossible. And
the confusion becomes worse because this change of meaning of
the words describing political ideals is not a single event but a
continuous process, a technique employed consciously or uncon-
sciously to direct the people. Gradually, as this process con-
tinues, the whole language becomes despoiled, words become
empty shells deprived of any definite meaning, as capable of
denoting one thing as its opposite and used solely for the
emotional associations which still adhere to them.

# # # * *

It is not difficult to deprive the great majority of independent
thought. But the minority who will retain an inclination to
criticise must also be silenced. We have already seen why
coercion cannot be confined to the acceptance of the ethical code
underlying the plan according to which all social activity is
directed. Since many parts of this code will never be explicitly
stated, since many parts of the guiding scale of values will exist
only implicitly in the plan, the plan itself in every detail, in fact
every act of the government, must become sacrosanct and exempt
from criticism. If the people are to support the common effort
without hesitation, they must be convinced that not only the end
aimed at but also the means chosen are the right ones. The
official creed, to which adherence must be enforced, will therefore

1 Mr. Peter Drucker ( The End of Economic Man, p. 74 ) correctly observes
that “ the less freedom there is, the more there is talk of the ‘ new freedom ’.
Yet this new freedom is a mere word which covers the exact contradiction of
all that Europe ever understood by freedom. . . . The new freedom which
is preached in Europe is, however, the right of the majority against the
individual.”

THE END OF TRUTH

II 9

comprise all the views about facts on which the plan is based.
Public criticism or even expressions of doubt must be suppressed
because they tend to weaken public support. As the Webbs
report of the position in every Russian enterprise : “ Whilst the
work is in progress, any public expression of doubt, or even fear
that the plan will not be successful, is an act of disloyalty and
even of treachery because of its possible effects on the will and
on the efforts of the rest of the staff.” 1 When the doubt or fear
expressed concerns not the success of a particular enterprise but
of the whole social plan, it must even more be treated as sabotage.

Facts and theories must thus become no less the object of
an official doctrine than views about values. And the whole
apparatus for spreading knowledge, the schools and the press,
wireless and cinema, will be used exclusively to spread those
views which, whether true or false, will strengthen the belief in
the rightness of the decisions taken by the authority ; and all
information that might cause doubt or hesitation will be withheld.
The probable effect on the people’s loyalty to the system becomes
the only criterion for deciding whether a particular piece of
information is to be published or suppressed. The situation in
a totalitarian state is permanently and in all fields the same that
it is elsewhere in some fields in wartime. Everything which
might cause doubt about the wisdom of the government or create
discontent will be kept from the people. The basis of unfavour-
able comparisons with conditions elsewhere, the knowledge of
possible alternatives to the course actually taken, information
which might suggest failure on the part of the government to
live up to its promises or to take advantage of opportunities to
improve conditions, will all be suppressed. There is consequently
no field where the systematic control of information will not be
practised and uniformity of views not enforced.

This applies even to fields apparently most remote from any
political interests, and particularly to all the sciences, even the
most abstract. That in the disciplines dealing directly with
human affairs and therefore most immediately affecting political
views, such as history, law, or economics, the disinterested search
for truth cannot be allowed in a totalitarian system, and the
vindication of the official views becomes the sole object, is easily
seen and has been amply confirmed by experience. These dis-
ciplines have indeed in all totalitarian countries become the most
fertile factories of the official myths which the rulers use to guide
the minds and wills of their subjects. It is not surprising that
in these spheres even the pretence that they search for truth is
abandoned and that the authorities decide what doctrines ought
to be taught and published.

1 S. and B. Webb, Soviet Communism, p. 1038.

120

THE ROAD TO SERFDOM

Totalitarian control of opinion extends, however, also to'subjects
which at first seem to have no political significance. Sometimes
it is difficult to explain why particular doctrines should be officially
proscribed or why others should be encouraged, and it is curious
that these likes and dislikes are apparently somewhat similar in
the different totalitarian systems. In particular, they all seem to
have in common an intense dislike of the more abstract forms of
thought — a dislike characteristically also shown by many of the
collectivists among our scientists. Whether the theory of relativ-
ity is represented as a “ Semitic attack on the foundation of
Christian and Nordic physics ” or opposed because it is “ in
conflict with dialectical materialism and Marxist dogma ” comes
very much to the same thing. Nor does it make much difference
whether certain theorems of mathematical statistics are attacked
because they “ form part of the class struggle on the ideological
frontier and are a product of the historical role of mathematics
as the servant of the bourgeoisie ”, or whether the whole subject
is condemned because “ it provides no guarantee that it will serve
the interest of the people ”. It seems that pure mathematics
is no less a victim and that even the holding of particular views
about the nature of continuity can be ascribed to “ bourgeois
prejudices According to the Webbs the Journal for Marxist-
Leninist Natural Sciences has the following slogans : “ We stand
for Party in Mathematics. We stand for the purity of Marxi^t-
Leninist theory in surgery.” The situation seems to be very
similar in Germany. The Journal of the National- Socialist
Association of Mathematicians is full of “ party in mathematics ”,
and one of the best known German physicists, the Nobel prizeman
Lennard, has summed up his life work under the title German
Physics in Four Volumes !

It is entirely in keeping with the whole spirit of totalitarianism
that it condemns any human activity done for its own sake and
without ulterior purpose. Science for science’ sake, art for art’s
sake, are equally abhorrent to the Nazis, our socialist intellectuals,
and the communists. Every activity must derive its justification
from a conscious social purpose. There must be no spontaneous,
unguided activity, because it might produce results which can-
not be foreseen and for which the plan does not provide. It
might produce something new, undreamt of in the philosophy
of the planner. The principle extends even to games and amuse-
ments. I leave it to the reader to guess whether it was in
Germany or in Russia where chess-players were officially exhorted
that “ we must finish once and for all with the neutrality of chess.
We must condemn once and for all the formula ‘ chess for the
sake of chess ’ like the formula ‘ art for art’s sake ’

Incredible as some of these aberrations may appear, we must

THE END OF TRUTH I 21

yet be on our guard not to dismiss them as mere accidental
by-products which have nothing to do with the essential character
of a planned or totalitarian system. They are not. They are a
direct result of that same desire to see everything directed by a
“ unitary conception of the whole ”, of the need to uphold at all
costs the views in the service of which people are asked to make
constant sacrifices, and of the general idea that the knowledge
and beliefs of the people are an instrument to be used for a single
purpose. Once science has to serve, not truth, but the interests
of a class, a community, or a state, the sole task of argument and
discussion is to vindicate and to spread still further the beliefs
by which the whole life of the community is directed. As the
Nazi Minister of Justice has explained, the question which every
new scientific theory must ask itself is : “ Do I serve National-
Socialism for the greatest benefit of all ? ”

The word truth itself ceases to have its old meaning. It
describes no longer something to be found, with the individual
conscience as the sole arbiter of whether in any particular instance
the evidence (or the standing of those proclaiming it) warrants
a belief ; it becomes something to be laid down by authority,
something which has to be believed in the interest of the unity
of the organised effort, and which may have to be altered as the
exigencies of this organised effort require it.

The general intellectual climate which this produces, the spirit
of complete cynicism as regards truth which it engenders, the
loss of the sense of even the meaning of truth, the disappearance
of the spirit of independent inquiry and of the belief in the power
of rational conviction, the way in which differences of opinion in
every branch of knowledge become political issues to be decided
by authority, are all things which one must personally experience —
no short description can convey their extent. Perhaps the most
alarming fact is that contempt for intellectual liberty is not a
thing which arises only once the totalitarian system is established,
but one which can be found everywhere among intellectuals who
have embraced a collectivist faith and who are acclaimed as
intellectual leaders even in countries still under a liberal regime.
Not only is even the worst oppression condoned if it is committed
in the name of socialism, and the creation of a totalitarian system
openly advocated by people who pretend to speak for the scientists
of liberal countries ; intolerance too is openly extolled. Have
we not recently seen a British scientific writer defend even
Inquisition because in his opinion it “ is beneficial to science
when it protects a rising class ” ? 1 This view is, of course, prac-
tically indistinguishable from the views which led the Nazis to
the persecution of men of science, the burning of scientific books,

1 J. G. Crowther, The Social Relations of Science, 1941, p. 333.

E

122

THE ROAD TO SERFDOM

and the systematic eradication of the intelligentsia of the subjected
people.

# # # * *

The desire to force upon the people a creed which is regarded
as salutary for them is, of course, not a thing that is new or
peculiar to our time. New, however, is the argument by which
many of our intellectuals try to justify such attempts. There is
no real freedom of thought in our society, so it is said, because
the opinions and tastes of the masses are shaped by propaganda,
by advertising, by the example of the upper classes, and by other
environmental factors which inevitably force the thinking of the
people into well-worn grooves. From this it is concluded that
if the ideals and tastes of the great majority are always fashioned
by circumstances which we can control, we ought to use this
power deliberately to turn the thoughts of the people in what
we think is a desirable direction.

Probably it is true enough that the great majority are rarely
capable of thinking independently, that on most questions they
accept views which they find ready-made, and that they will be
equally content if born or coaxed into one set of beliefs or another.
In any society freedom of thought will probably be of direct
significance only for a small minority. But this does not mean
that anyone is competent, or ought to have power, to select those
to whom this freedom is to be reserved. It certainly does not
justify the presumption of any group of people to claim the right
to determine what people ought to think or believe. It shows a
complete confusion of thought to suggest that, because under any
sort of system the majority of people follow the lead of somebody,
it makes no difference if everybody has to follow the same lead.
To deprecate the value of intellectual freedom because it will
never mean for everybody the same possibility of independent
thought is completely to miss the reasons which give intellectual
freedom its value. What is essential to make it serve its function
as the prime mover of intellectual progress is not that everybody
may be able to think or write anything, but that any cause or
idea may be argued by somebody. So long as dissent is not
suppressed, there will always be some who will query the ideas
ruling their contemporaries and put new ideas to the test of
argument and propaganda.

This interaction of individuals, possessing different knowledge
and different views, is what constitutes the life of thought. The
growth of reason is a social process based on the existence of
such differences. It is of its essence that its results cannot be
predicted, that we cannot know which views will assist this growth
<- and which will not — in short, that this growth cannot be governed

THE END OF TRUTH

123

by any views which we now possess without at the same time
limiting it. To “ plan ” or “ organise ” the growth of mind, or,
for that matter, progress in general, is a contradiction in terms.
The idea that the human mind ought “ consciously ” to control its
own development confuses individual reason, which alone can
“ consciously control ” anything, with the interpersonal process
to which its growth is due. By attempting to control it we are
merely setting bounds to its development and must sooner or
later produce a stagnation of thought and a decline of reason.

The tragedy of collectivist thought is that while it starts out
to make reason supreme, it ends by destroying reason because
it misconceives the process on which the growth of reason
depends. It may indeed be said that it is the paradox of all
collectivist doctrine and its demand for the “ conscious ” control
or “ conscious ” planning that they necessarily lead to the demand
that the mind of some individual should rule supreme — while only
the individualist approach to social phenomena makes us recog-
nise the super-individual forces which guide the growth of reason.
Individualism is thus an attitude of humility before this social
process and of tolerance to other opinions, and is the exact
opposite of that intellectual hubris which is at the root of the
demand for comprehensive direction of the social process.

CHAPTER XII

THE SOCIALIST ROOTS OF NAZISM

All anti-liberal forces are combining against everything that
is liberal.

A. Moeller van den Bruck.

IT is a common mistake to regard National-Socialism as a mere
revolt against reason, an irrational movement without intellectual
background. If that were so, the movement would be much less
dangerous than it is. But nothing could be further from the
truth or more misleading. The doctrines of National-Socialism
are the culmination of a long evolution of thought, a process
in which thinkers who have had great influence far beyond
the confines of Germany have taken part. . Whatever one may
think of the premises from which they started, it cannot be denied
that the men who produced the new doctrines were powerful
writers who left the impress of their ideas on the whole of
European thought. Their system was developed with ruthless
consistency. Once one accepts the premises from which it
starts, there is no escape from its logic. It is simply Collectivism
freed from all traces of an individualist tradition which might
hamper its realisation.

Though in this development German thinkers have taken the
lead, they were by no means alone. Thomas Carlyle and Houston
Stewart Chamberlain, Auguste Comte and Georges Sorel are as
much a part of that continuous development as any Germans.
The development of this strand of thought within Germany has
been well traced recently by Mr. R. D. Butler in his study of
The Roots of National Socialism. But although its persistence
there through a hundred and fifty years in almost unchanged
and ever-recurring form, which emerges from that study, is rather
frightening, it is easy to exaggerate the importance these ideas
had in Germany before 1914. They were only one strand of
thought among a people then perhaps more varied in its views
than any other. And they were on the whole represented by a
small minority and held in as great contempt by the majority of
Germans as they were in other countries.

What, then, caused these views held by a reactionary minority
finally to gain the support of the great majority of Germans
and practically the whole of her youth ? It was not merely
the defeat, the suffering, and the wave of nationalism which
led to their success. Still less was the cause, as so many people
/vish to believe, a capitalist reaction against the advance of

124

THE SOCIALIST ROOTS OF NAZISM 1 25

socialism. On the contrary, the support which brought these
ideas to power came precisely from the socialist camp. It
was certainly not through the bourgeoisie, but rather through
the absence of a strong bourgeoisie, that they were helped to
power.

The doctrines which had guided the ruling elements in Germany
for the past generation were not opposed to the socialism in
Marxism, but to the liberal elements contained in it, its inter-
nationalism and its democracy. And as it became increasingly
clear that it was just these elements which formed obstacles to
the realisation of socialism, the socialists of the left approached
more and more to those of the right. It was the union of the
anti-capitalist forces of the right and the left, the fusion of radical
and conservative socialism, which drove out from Germany
everything that was liberal.

The connection between socialism and nationalism in Germany
was close from the beginning. It is significant that the most
important ancestors of National- Socialism — Fichte, Rodbertus,
and Lassalle — are at the same time acknowledged fathers of
socialism. While theoretical socialism in its Marxist form
was directing the German labour movement, the authoritarian
and nationalist element receded for a time into the background.
But not for long. 1 From 1914 onwards there arose from the
ranks of Marxist socialism one teacher after another who led, not
the conservatives and reactionaries, but the hardworking labourer
and idealist youth into the national-socialist fold. It was only
thereafter that the tide of nationalist socialism attained major
importance and rapidly grew into the Hitlerian doctrine. The
war hysteria of 1914, which, just because of the German defeat,
was never fully cured, is the beginning of the modern development
which produced National-Socialism, and it was largely with the
assistance of old socialists that it rose during this period.

# # # # *

Perhaps the first, and in some ways the most characteristic,
representative of this development is the late Professor. Werner
Sombart, whose notorious Handler und Helden (Merchants and
Heroes) appeared in 19x5. Sombart had begun as a Marxian
socialist, and as late as 1909 could assert with pride that he had
devoted the greater part of his life to fighting for the ideas of Karl
Marx. He had done as much as any man to spread socialist
ideas and anti-capitalist resentment of varying shades throughout

x And only partially. In 1892 one of the leaders of the social-democratic
party, August Bebel, was able to tell Bismarck that “ the Imperial Chancellor
can rest assured that German Social Democracy is a sort of preparatory schook
for militarism ” I

126 THE ROAD TO SERFDOM

Germany ; and if German thought became penetrated with
Marxian elements in a way that was true of no other country till
the Russian revolution, this was in a large measure due to Sombart.
At one time he was regarded as the outstanding representative of
the persecuted socialist intelligentsia, unable, because of his
radical views, to obtain a University chair. And even after the
last war the influence, inside and outside Germany of his work
as a historian, which remained Marxist in approach after he had
ceased to be a Marxist in politics, was most extensive and is
particularly noticeable in the works of many of the English and
American planners.

In his war book this old socialist welcomed the “ German
War ” as the inevitable conflict between the commercial civilisation
of England and the heroic culture of Germany. His contempt
for the “ commercial ” views of the English people, who had
lost all warlike instincts, is unlimited. Nothing is more con-
temptible in his eyes than the universal striving after the happiness
of the individual ; and what he describes as the leading maxim
of English morals : be just “ that it may be well with thee and
that thou mayest prolong thy days upon the land ” is to him “ the
most infamous maxim which has ever been pronounced by a com-
mercial mind ”. The “ German idea of the state ” as formulated
by Fichte, Lassalle, and Rodbertus, is that the state is neither
founded nor formed by individuals, nor an aggregate of individuals,
nor is its purpose to serve any interest of individuals. It is
a V olksgemeinschaft in which the individual has no rights but
only duties. Claims of the individual are always an outcome
of the commercial spirit. “ The ideas of 1789 ” — Liberty,
Equality Fraternity — are characteristically commercial ideals
which have no other purpose but to secure certain advantages
to individuals.

Before 1914 all the true German ideals of a heroic life were
in deadly danger before the continuous advance of English com-
mercial ideals, English comfort, and English sport. The English
people had not only themselves become completely corrupted,
every trade unionist being sunk in the “ morass of comfort ”,
but they had begun to infect all other peoples. Only the war had
helped the Germans to remember that they were really a people
of warriors, a people among whom all activities and particularly all
economic activities were subordinated to military ends. Sombart
knew that the Germans were held in contempt by other people
because they regard war as sacred — but he glories in it. To regard
war as inhuman and senseless is a product of commercial views.
There is a life higher than the individual life, the life of the people
,and the life of the state, and it is the purpose of the individual
to sacrifice himself for that higher life. War is to Sombart the

THE SOCIALIST ROOTS OF NAZISM 1 27

consummation of the heroic view of life, and the war against
England is the war against the opposite ideal, the commercial
ideal of individual freedom and of English comfort, which in his
eyes finds its most contemptible expression in— the safety-razors
found in the English trenches.

# # * * #

If Sombart’s outburst was at the time too much even for most
Germans, another German professor arrived at essentially the
same ideas in a more moderate and more scholarly, but for that
reason even more effective, form. Professor Johann Plenge was
as great an authority on Marx as Sombart. His book on Marx
und Hegel marks the beginning of the modern Hegel-renaissance
among Marxian scholars ; and there can be no doubt about the
genuinely socialist nature of the convictions with which he started.
Among his numerous war publications the most important is
a small but at the time widely discussed book with the significant
title : 1789 and 1914. The Symbolic Years in the History of the
Political Mind. It is devoted to the conflict between the “ Ideas
of 1789 ”, the ideal of freedom, and the “ Ideas of 1914 ”, the
ideal of organisation. Organisation is to him, as to all socialists
who derive their socialism from a crude application of scientific
ideals to the problems of society, the essence of socialism. It
was, as he rightly emphasises, the root of the socialist movement
at its inception in early nineteenth-century France. Marx and
Marxism have betrayed this basic idea of socialism by their
fanatic but utopian adherence to the abstract idea of freedom.
Only now was the idea of organisation again coming into its own,
elsewhere, as witnessed by the work of Mr. H. G. Wells (by
whose Future in America Professor Plenge was profoundly
influenced, and whom he describes as one of the outstanding
figures of modern socialism), but particularly in Germany, where
it is best understood and most fully realised. The war between
England and Germany is therefore really a conflict between two
opposite principles. The “ Economic World War ” is the third
great epoch of spiritual struggle in modern history. It is of equal
importance with the Reformation and the bourgeois revolution of
liberty. It is the struggle for the victory of the new forces born
out of the advanced economic life of the nineteenth century :
socialism and organisation.

Because in the sphere of ideas Germany was the most convinced
exponent of all socialist dreams, and in the sphere of reality she was
the most powerful architect of the most highly organised economic
system. — In us is the twentieth century. However the war may end,
we are the exemplary people. Our ideas will determine the aims^
of the life of humanity. — World History experiences at present the

128 THE ROAD TO SERFDOM

colossal spectacle that with us a new great ideal of life penetrates
to final victory, while at the same time in England one of the World-
Historical principles finally collapses.

The war economy created in Germany in 1914

is the first realisation of a socialist society and its spirit the first
active, and not merely demanding, appearance of a socialist spirit.
The needs of the war have established the socialist idea in German
economic life, and thus the defence of our nation produced for
humanity the idea of 1914, the idea of German organisation, the
people’s community ( Volksgemeinschaft ) of national socialism. . . .
Without our really noticing it the whole of our political life in state
and industry has risen to a higher stage. State and economic life
form a new unity. . . . The feeling of economic responsibility
which characterises the work of the civil servant pervades all private
activity. . . . The new German corporative constitution of
economic life [which Professor Plenge admits is not yet ripe or
complete] is the highest form of life of the state which has ever
been known on earth.

At first Professor Plenge still hoped to reconcile the ideal of
liberty and the ideal of organisation, although largely through the
complete but voluntary submission of the individual to the whole.
But these traces of liberal ideas soon disappear from his writings.
By 1918 the union between socialism and ruthless power politics
had become complete in his mind. Shortly before the end of the
war he exhorted his compatriots in the socialist journal Die Glocke
in the following manner :

It is high time to recognise the fact that socialism must be power
policy, because it is to be organisation. Socialism has to win power :
it must never blindly destroy power. And the most important and
critical question for socialism in the time of war of peoples is
necessarily this : what people is pre-eminently summoned to power,
because it is the exemplary leader in the organisation of peoples ?

And he forecast all the ideas which were finally to justify
Hitler’s New Order :

Just from the point of view of socialism, which is organisation, is
not an absolute right of self-determination of the peoples the right
of individualistic economic anarchy ? Are we willing to grant com-
plete self-determination to the individual in economic life ? Con-
sistent socialism can accord to the people a right to incorporation
only in accordance with the real distribution of forces historically
determined.

* * * # #

The ideals which Plenge expressed so clearly were especially
popular among, and perhaps even derive from, certain circles

THE SOCIALIST ROOTS OF NAZISM

129

of German scientists and engineers who, precisely as is now
so loudly demanded by their English counterparts, clamoured for
the centrally planned organisation of all aspects of life. Leading
among these was the famous chemist Wilhelm Ostwald, one
of whose pronouncements on this point has achieved a certain
celebrity. He is reported to have stated publicly that

Germany wants to organise Europe which up to now still
lacks organisation. I will explain to you now Germany’s great
secret : we, or perhaps the German race, have discovered the
significance of organisation. While the other nations still live
under the regime of individualism, we have already achieved that
of organisation.

Ideas very similar to these were current in the offices of the
German raw material dictator, Walter Rathenau, who, although
he would have shuddered had he realised the consequences of
his totalitarian economics, yet deserves a considerable place in
any fuller history of the growth of Nazi ideas. Through his
writings he has probably, more than any other man, determined
the economic views of the generation which grew up in Germany
during and immediately after the last war ; and some of his
closest collaborators were later to form the backbone of the staff
of Goering’s Five Year Plan administration. Very similar also
was much of the teaching of another former Marxist, Friedrich
Naumann, whose Mitteleuropa reached probably the greatest
circulation of any war book in Germany . 1 But it was left to an
active socialist politician, a member of the left wing of the social-
democratic party in the Reichstag, to develop these ideas most
fully and to spread them far and wide. Paul Lensch had already
in earlier books described the war as “ the flight of the English
bourgeoisie before the advance of socialism ”, and explained how
different were the socialist ideal of freedom and the English
conception. But only in his .third and most successful war book,
his Three Years of World Revolution , 2 were his characteristic
ideas, under the influence of Plenge, to achieve full develop-
ment. Lensch bases his argument on an interesting and in
many respects accurate historical account of how the adoption
of protection by Bismarck had made possible in Germany a
development towards that industrial concentration and cartellisa-
tion which, from his Marxist standpoint, represented a higher
state of industrial development.

1 A good summary of Naumann’s views, as characteristic of the German
combination of Socialism and Imperialism as any we quote in the text,
will be found in R. D. Butler, The Roots of National Socialism , 1941, pp.
203-9.

2 Paul Lensch, Three Years of World Revolution. Preface by J. E. M., Lon-
don, 1918. The English translation of this work was made available, still
during the last war, by some far-seeing person.

130 THE ROAD TO SERFDOM

The result of Bismarck’s decision of the year 1879 was that
Germany took on the role of the revolutionary ; that is to say, of
a state whose position in relation to the rest of the world is that of
a representative of a higher and more advanced economic system.
Having realised this, we should perceive that in the present World
Revolution Germany represents the revolutionary, and her greatest
antagonist, England, the counter-revolutionary side. This fact proves
how little the constitution of a country, whether it be liberal and
republican or monarchic and autocratic, affects the question whether,
from the point of view of historical development, that country is
to be regarded as liberal or not. Or, to put it more plainly, our
conceptions of Liberalism, Democracy, and so forth, are derived
from the ideas of English Individualism, according to which a state
with a weak government is a liberal state, and every restriction upon
the freedom of the individual is conceived as the product of autocracy
and militarism.

In Germany, the “ historically appointed representative ” of

this higher form of economic life,

the struggle for socialism has been extraordinarily simplified, since
all the prerequisite conditions of Socialism had already become
established there. And hence it was necessarily a vital concern of
any socialist party that Germany should triumphantly hold her own
against her enemies, and thereby be able to fulfil her historic mission
of revolutionising the world. Hence the war of the Entente against
Germany resembled the attempt of the lower bourgeoisie of the
pre-capitalistic age to prevent the decline of their own class.

That organisation of Capital [Lensch continues] which began
unconsciously before the war, and which during the war has been
continued consciously, will be systematically continued after the war.
Not through any desire for any arts of organisation nor yet because
socialism has been recognised as a higher principle of social develop-
ment. The classes who are to-day the practical pioneers of socialism
are, in theory, its avowed opponents, or, at any rate, were so up to
a short time ago. Socialism is coming, and in fact has to some
extent already arrived, since we can no longer live without it.

The only people who still oppose this tendency are the liberals.

This class of people, who unconsciously reason from English
standards, comprises the whole educated German bourgeoisie.
Their political notions of “ freedom ” and “ civic right ”, of con-
stitutionalism and parliamentarianism, are derived from that
individualistic conception of the world, of which English Liberalism
is a classical embodiment, and which was adopted by the spokesmen
of the German bourgeoisie in the ’fifties, ’sixties, and ’seventies of
the nineteenth century. But these standards are old-fashioned and
shattered, just as old-fashioned English Liberalism has been shattered
by this war. What has to be done now is to get rid of these inherited
political ideas and to assist the growth of a new conception of State

THE SOCIALIST ROOTS OF NAZISM

131

and Society. In this sphere also Socialism must present a conscious
and determined opposition to individualism. In this connection it
is an astonishing fact that, in the so-called “ reactionary ” Germany,
the working classes have won for themselves a much more solid and
powerful position in the life of the state than is the case either in
England or in France.

Lensch follows this up with a consideration which again
contains much truth and which deserves to be pondered :

Since the Social Democrats, by the aid of this [universal] suffrage,
occupied every post which they could obtain in the Reichstag, the
State Parliament, the municipal councils, the courts for the settlement
of trade disputes, the sick funds, and so forth, they penetrated very
deeply into the organism of the state ; but the price which they had
to pay for this was that the state, in its turn, exercised a profound
influence upon the working classes. To be sure, as the result of
strenuous socialistic labours for fifty years, the state is no longer the
same as it was in the year 1867, when universal suffrage first came
into operation ; but then, Social Democracy, in its turn, is no longer
the same as it was at the time. The state has undergone a process
of socialisation, and Social Democracy has undergone a process of
nationalisation.

# # # # #

Plenge and Lensch in turn have provided the leading ideas for
the immediate masters of National-Socialism, particularly Oswald
Spengler and A. Moeller van den Bruck, to mention only the two
best-known names. 1 Opinions may differ in how far the former
can be regarded as a socialist. But that in his tract on Prussianism
and Socialism, which appeared in 1920, he merely gave expression
to ideas widely held by German socialists will now be evident.
A few specimens of his argument will suffice. “ Old Prussian
spirit and socialist conviction, which to-day hate each other with
the hatred of brothers, are one and the same.” The repre-
sentatives of Western civilisation in Germany, the German
liberals, are “ the invisible English army which after the battle
of Jena, Napoleon left behind on German soil ”. To Spengler,
men like Hardenberg and Humboldt and all the other liberal
reformers were “ English But this “ English ” spirit will
be turned out by the German revolution which began in
19x4.

1 The same applies to many others of the intellectual leaders of the generation
which has produced Nazism, such as Othmar Spann, Hans Freyer, Carl
Schmitt, and Ernst Junger. On these compare the interesting study by
Aurel Kolnai, The War against the West, 1938, which suffers, however, from
the defect that, by confining itself to the post-war period when these ideals had
already been taken over by the nationalists, it overlooks their socialist creators.

132 the road to serfdom

The three last nations of the Occident have aimed at three forms
of existence, represented by famous watchwords : Freedom, Equality,
Community. They appear in the political forms of liberal Parlia-
mentarianism, social Democracy, and authoritarian socialism . 1 . . .
The German, more correctly, Prussian, instinct is : the power
belongs to the whole. . . . Everyone is given his place. One
commands or obeys. This is, since the eighteenth century, authori-
tarian socialism, essentially illiberal and anti-democratic, in so far
as English Liberalism and French Democracy are meant. . . .
There are in Germany many hated and ill-reputed contrasts, but
liberalism alone is contemptible on German soil.

The structure of the English nation is based on the distinction
between rich and poor, that of the Prussian on that between command
and obedience. The meaning of class distinction is accordingly
fundamentally different in the two countries.

After pointing out the essential difference between the English
competitive system and the Prussian system of “ economic
administration ”, and after showing (consciously following Lensch)
how since Bismarck the deliberate organisation of economic
activity had progressively assumed more socialist forms, Spengler
continues :

In Prussia there existed a real state in the most ambitious meaning
of the word. There could be, strictly speaking, no private persons.
Everybody who lived within the system that worked with the
precision of a clockwork, was in some way a link in it. The
conduct of public business could therefore not be in the hands of
private people, as is supposed by Parliamentarianism. It was an
Amt and the responsible politician was a civil servant, a servant of
the whole.

The “ Prussian idea ” requires that everybody should become a
state official, that all wages and salaries be fixed by the state.
The administration of all property, in particular, becomes a
salaried function. The state of the future will be a Beamtenstaat.
But

the decisive question not only for Germany, but for the world,
which must be solved by Germany for the world is : Is in future
trade to govern the state, or the state to govern trade ? In the face
of this question Prussianism and Socialism are the same . . .
Prussianism and Socialism combat the England in our midst.

1 This Spenglerian formula finds its echo in an often quoted statement of
Carl Schmitt, the leading Nazi expert on constitutional law, according to which
the evolution of government proceeds “ in three dialectic stages : from the
absolute state of the seventeenth and eighteenth centuries through the neutral
state of the liberal nineteenth century to the totalitarian state in which state
and society are identical ” (C. Schmitt, Der Hiiter der Verfassung, Tubingen,
1931. P- 79 )-

THE SOCIALIST ROOTS OF NAZISM 1 33

It was only a step from this for the patron-saint of National-
Socialism Moeller van den Bruck to proclaim the World War
a war between liberalism and socialism : “ We have lost the war
against the West. Socialism has lost it against Liberalism.” 1
As with Spengler, liberalism is, therefore, the arch-enemy.
Moeller van den Bruck glories in the fact that

there are no liberals in Germany to-day ; there are young revolu-
tionaries : there are young conservatives. But who would be a
liberal ? . . . Liberalism is a philosophy of life from which German
youth now turns with nausea, with wrath, with quite peculiar scorn,
for there is none more foreign, more repugnant, more opposed to its
philosophy. German youth to-day recognises the liberal as the
arch-enemy.

Moeller van den Brack's Third Reich was intended to give the
Germans a socialism adapted to their nature and undefiled by
Western liberal ideas. And so it did.

These writers were by no means isolated phenomena. As
early as 1922 a detached observer could speak of a “ peculiar
and, on a first glance, surprising phenomenon ” then to be
observed in Germany :

The fight against the capitalistic order, according to this view, is
a continuation of the war against the Entente with the weapons of
the spirit and of economic organisation, the way which leads to
practical socialism, a return of the German people to their best and
noblest traditions. 3

Fight against liberalism in all its forms, liberalism that had
defeated Germany, was the common idea which united socialists
and conservatives in one common front. At first it was mainly
in the German Youth Movement, almost entirely socialist in
inspiration and outlook, where these ideas were most readily
accepted and the fusion of socialism and nationalism completed.
In the later 'twenties and till the advent to power of Hitler a
circle of young men gathered round the journal Die Tat and
led by Ferdinand Fried became the chief exponent of this
tradition in the intellectual sphere. Fried’s Ende des Kapitalismus
is perhaps the most characteristic product of this group of
Edelnazis, as they were known in Germany, and is particularly

1 Moeller van den Bruck, Sozialismus und Aussenpolitik, 1933, pp. 87, 90,
and 100. The articles here reprinted, particularly the article on “ Lenin and
Keynes ” which discusses most fully the contention discussed in the text, were
first published between 1919 and 1923.

2 K. Pribram, “ Deutscher Nationalismus und Deutscher Sozialismus ”, in
Archtv fur Sozialwissenschaft und Sozialpolitik, vol. 49, 1922, pp. 298-9. The
writer mentions as further examples the philosopher Max Scheler preaching
“ the socialist world mission of Germany ”, and the Marxist K. Korsch writing •
on the spirit of the new Volksgemeinschaft , as arguing in the same vein.

134 THE ROAD TO SERFDOM

disquieting because of its resemblance to so much of the
literature which we see in England to-day, where we can watch
the same drawing together of the socialists of the Left and
the Right, and nearly the same contempt of all that is liberal in
the old sense. “ Conservative Socialism ” (and, in other circles,
“ Religious Socialism ”) was the slogan under which a large
number of writers prepared the atmosphere in which “ National-
Socialism ” succeeded. It is “ conservative socialism ” which is
the dominant trend in this country now. Had the war against
the Western powers “ with the weapons of the spirit and of
economic organisation ” not almost succeeded before the real
war began ?

CHAPTER XIII

THE TOTALITARIAN IN OUR MIDST

When authority presents itself in the guise of organisation
it develops charms fascinating enough to convert communities
of free people into totalitarian States.

The Times.

PROBABLY it is true that the very magnitude of the outrages
committed by the totalitarian governments, instead of increasing
the fear that such a system might one day arise in this country,
has rather strengthened the assurance that it cannot happen here.
When we look to Nazi Germany the gulf which separates us seems
so immense that nothing that happens there can possess relevance
for any possible development in this country. And the fact that
the difference has steadily become greater seems to refute any
suggestion that we may be moving in a similar direction. But
let us not forget that fifteen years ago the possibility of such a
thing happening in Germany would have appeared just as fan-
tastic, not only to nine-tenths of the Germans themselves, but
also to the most hostile foreign observers (however wise they
may now pretend to have been).

As suggested earlier in these pages, however, it is not the present
Germany but the Germany of twenty or thirty years ago to which
conditions in this country show an ever-increasing resemblance.
There are many features which were then regarded as “ typically
German ” and which are now equally familiar in this country,
and many symptoms that point to a further development in the
same direction. We have already mentioned the most significant,
the increasing similarity between the economic views of the Right
and Left and their common opposition to the Liberalism that
used to be the common basis of most English politics. We have
the authority of Mr. Harold Nicolson for the statement that during
the last Conservative government, among the back-benchers of
the Conservative party “ the most gifted . . . were all socialists
at heart ” ; 1 and there can be little question that, as in the days
of the Fabians, many socialists have more sympathy with the
Conservatives than with the Liberals. There are many other
features closely related to this. The increasing veneration for
the state, the admiration of power, and of bigness for bigness’
sake, the enthusiasm for “ organisation ” of everything (we now
call it planning), and that “ inability to leave anything to the
simple power of organic growth ”, which even H. v. Treitschke
1 The Spectator, April 12, 1940, p. 523.

G5

136 THE ROAD TO SERFDOM

deplored in the Germans sixty years ago, are all scarcely less
marked in this country now than they were in Germany.

How far in the last twenty years England has travelled on the
German path is brought home to one with extraordinary vividness
if one now reads some of the more serious discussions of the
differences between British and German views on political and
moral issues which appeared in this country during the last war.
It is probably true to say that then the British public had in
general a truer appreciation of these differences than it has now ;
but while the people of this country were then proud of their dis-
tinctive tradition, there are few of the political views then regarded
as characteristically English of which the majority of people in
this country do not now seem half ashamed, if they do not posi-
tively repudiate them. It is scarcely an exaggeration to say that
the more typically English a writer on political or social problems
then appeared to the world, the more is he to-day forgotten in
his own country. Men like Lord Morley or Henry Sidgwick,
Lord Acton or A. V. Dicey, who were then admired in the world
at large as outstanding examples of the political wisdom of liberal
England, are to the present generation largely obsolete Victorians.
Perhaps nothing shows this change more clearly than that, while
there is no lack of sympathetic treatment of Bismarck in con-
temporary English literature, the name of Gladstone is rarely
mentioned by the younger generation without a sneer over his
Victorian morality and naive utopianism.

I wish I could in a few paragraphs adequately convey the
alarming impression gained from the perusal of a few of the
English works on the ideas dominating the Germany of the last
war, where almost every word could be applied to the views
most conspicuous in current English literature. I shall merely
quote one brief passage by Lord Keynes, describing in 1915
the “ nightmare ” which he found expounded in a typical
German work of that period : he describes how according to
a German author

even in peace industrial life must remain mobilised. This is what
he means by speaking of the “ militarisation of our industrial life ”
[the title of the work reviewed]. Individualism must come to an
end absolutely. A system of regulations must be set up, the object
of which is not the greater happiness of the individual (Professor
Jaffd is not ashamed to say this in so many words), but the strengthen-
ing of the organised unity of the state for the object of attaining the
maximum degree of efficiency ( Leistungsfahigkeit ), the influence of
which on individual advantage is only indirect. — This hideous doc-
trine is enshrined in a sort of idealism. The nation will grow into a
“ closed unity ” and will become, in fact, what Plato declared it should
be — “ Der Mensch im Grossen ”. In particular, the coming peace will
bring with it a strengthening of the idea of State action in industry.

THE TOTALITARIANS IN OUR MIDST

137

. . . Foreign investment, emigration, the industrial policy which
in recent years had regarded the whole world as a market, are
too dangerous. The old order of industry, which is dying to-day,
is based on Profit ; and the new Germany of the twentieth-century
Power without consideration of Profit is to make an end of that
system of Capitalism, which came over from England one hundred
years ago . 1

Except that no English author has yet to my knowledge dared
openly to disparage individual happiness, is there a passage in
this which is not mirrored in much of contemporary English
literature ?

And, undoubtedly, not merely the ideas which in Germany and
elsewhere prepared totalitarianism, but also many of the principles
of totalitarianism itself are what exercises an increasing fascination
in many other countries. Although few people, if anybody, in
this country would probably be ready to swallow totalitarianism
whole, there are few single features which we have not yet been
advised by somebody or other to imitate. Indeed, there is
scarcely a leaf out of Hitler’s book which somebody or other in
this country has not recommended us to take and use for our own
purposes. This applies particularly to many people who are
undoubtedly Hitler’s mortal enemies because of one special feature
in his system. We should never forget that the anti-semitism of
Hitler has driven from his country, or turned into his enemies,
many people who in every respect are confirmed totalitarians of
the German type . 2

No description in general terms can give an adequate idea of
the similarity of much of current English political literature to
the works which destroyed the belief in Western civilisation in
Germany and created the state of mind in which Nazism could
become successful. The similarity is even more one of the
temper with which the problems are approached than of the
specific arguments used — a similar readiness to break all cultural
ties with the past and to stake everything on the success of a
particular experiment. As was also true in Germany, most of

1 Economic Journal, 1915, p. 450.

* Especially when we consider the proportion of former socialists who have
become Nazis it is important to remember that the true significance of this ratio
is seen only if we compare it, not with the total number of former socialists,
but with the number of those whose conversion would not in any case have
been prevented by their ancestry. In fact, one of the surprising features of
the political emigration from Germany is the comparatively small number of
refugees from the Left who are not “ Jews ” in the German sense of the term. —
How often do we not hear eulogies of the German system prefaced by some
statement such as the following with which at a recent conference an enumera-
tion of the “ features of the totalitarian technique of economic mobilisation
which are worth thinking about ” was introduced : “ Herr Hitler is not my
ideal — far from it. There are very pressing personal reasons why Herr Hitlqr
should not be my ideal, but . . .”

138 THE ROAD TO SERFDOM

the works which are preparing the way for a totalitarian course
in this country are the product of sincere idealists and often of
men of considerable intellectual distinction. So, although it is
invidious to single out particular persons as illustrations where
similar views are advocated by hundreds of others, I see no other
way of demonstrating effectively how far this development has
actually advanced in this country. I shall deliberately choose
as illustrations authors whose sincerity and disinterestedness are
above suspicion. But though I hope in this way to show how
the views from which totalitarianism springs are now rapidly
spreading here, I stand little chance of conveying successfully
the equally important similarity in the emotional atmosphere.
An extensive investigation into all the subtle changes in thought
and language would be necessary to make explicit what one
readily enough recognises as symptoms of a familiar develop-
ment. Through meeting the kind of people who talk about the
necessity of opposing “ big ” ideas to “ small ” ones and of re-
placing the old “ static ” or “ partial ” thinking by the new
“ dynamic ” or “ global ” way one learns to recognise that what at
first appears sheer nonsense is a sign of the same intellectual
attitude with whose manifestations we can alone concern our-
selves here.

*****

My first examples are two works by a gifted scholar, which in
the last few years have attracted much attention. There are,
perhaps, few other instances in contemporary English literature
where the influence of the specific German ideas with which we
are concerned is so marked as in Professor E. H. Carr’s books
on the Twenty Years’ Crisis and the Conditions of Peace.

In the first of these two books Professor Carr frankly confessed
himself an adherent of “ the ‘ historical school ’ of realists [which]
had its home in Germany and [whose] development can be traced
through the great names of Hegel and Marx A realist, he
explains, is one “ who makes morality a function of politics ” and
who “ cannot logically accept any standard of value save that of
fact This “ realism ” is contrasted, in truly German fashion,
with the “ utopian ” thought dating from the eighteenth century
“ which was essentially individualist in that it made the human
conscience the final court of appeal But the old morals with
their “ abstract general principles ” must disappear because “ the
empiricist treats the concrete case on its individual merits In
other words, nothing but expediency matters, and we are even
assured that “ the rule pacta sunt servanda is not a moral
principle ”. That without abstract general principles merit
becomes solely a matter of arbitrary opinion, and that inter-

THE TOTALITARIAN IN OUR MIDST

r 39

national treaties, if they are not morally binding, have no meaning
whatever, does not seem to worry Professor Carr.

According to Professor Carr, indeed, although he does not
explicitly say so, it appears that England fought the last war on the
wrong side. Anyone who re-reads now the statements of British
war aims of twenty-five years ago and compares them with
Professor Carr’s present views will readily see that what were
then believed to be the German views are now those of Professor
Carr who would presumably argue that the different views then
professed in this country were merely a product of British
hypocrisy. How little difference he is able to see between the
ideals held in this country and those practised by present-day
Germany is best illustrated by his assertion that

it is true that when a prominent National-Socialist asserts that
“ anything that benefits the German people is right, anything that
harms them is wrong ” he is merely propounding the same identifica-
tion of national interest with universal right which has already been
established for English-speaking countries by [President] Wilson,
Professor Toynbee, Lord Cecil, and many others.

Since Professor Carr’s books are devoted to international
problems it is mainly in that field that their characteristic tendency
becomes apparent. But from the glimpses one gets of the char-
acter of the future society which he contemplates, it appears also
to be quite on the totalitarian model. Sometimes one even
wonders whether the resemblance is accidental or deliberate.
Does Professor Carr, for example, realise, when he asserts that
“ we can no longer find much meaning in the distinction familiar
to nineteenth-century thought between ‘ society ’ and ‘ state ’ ”,
that this is precisely the doctrine of Professor Carl Schmitt, the
leading Nazi theoretician of totalitarianism, and, in fact, the
essence of the definition of totalitarianism which that author has
given to that term which he himself had introduced ? Or that
the view that “ the mass production of opinion is the corollary
of the mass-production of goods ” and that, therefore, “ the
prejudice which the word propaganda still exerts in many minds
to-day is closely parallel to the prejudice against control of
industry and trade ” is really an apology for a regimentation of
opinion of the kind practised by the Nazis ?

In his more recent Conditions of Peace Professor Carr answers
with an emphatic affirmative the question with which we con-
cluded the last chapter :

The victors lost the peace, and Soviet Russia and Germany won
it, because the former continued to preach, and in part to apply,
the once valid, but now disruptive ideals of the rights of nations and
laissez-faire capitalism, whereas the latter, consciously or uncon-

THE ROAD TO SERFDOM

140

sciously borne forward on the tide of the twentieth century, were
striving to build up the world in larger units under centralised
planning and control.

Professor Carr completely makes his own the German battle-cry
of the socialist revolution of the East against the liberal West in
which Germany was the leader :

the revolution which began in the last war, which has been the driving
force of every significant political movement in the last twenty
years ... a revolution against the predominant ideas of the nine-
teenth century : liberal democracy, national self-determination and
laissez-faire economics.

As he himself rightly says “ it was almost inevitable that this
challenge to nineteenth-century beliefs which she had never really
shared should find in Germany one of its strongest protagonists ”.
With all the fatalistic belief of every pseudo-historian since Hegel
and Marx this development is represented as inevitable : “we
know the direction in which the world is moving, and we must
bow to it or perish.”

The conviction that this trend is inevitable is characteristically
based on familiar economic fallacies — the presumed necessity of
the general growth of monopolies in consequence of technological
developments, the alleged “ potential plenty ”, and all the other
popular catchwords which appear in works of this kind. Pro-
fessor Carr is not an economist and his economic argument
generally will not bear serious examination. But neither this,
nor his belief characteristically held at the same time, that the
importance of the economic factor in social life is rapidly decreas-
ing, prevent him from basing on economic arguments all his
predictions about the inevitable developments or from presenting
as his main demands for the future “ the reinterpretation in pre-
dominantly economic terms of the democratic ideals of ‘ equality ’
and ‘ liberty ’ ” !

Professor Carr’s contempt for all the ideas of liberal economists
(which he insists on calling nineteenth-century ideas, though he
knows that Germany “ had never really shared ” them and had
already in the nineteenth century practised most of the principles
he now advocates), is as profound as that of any of the German
writers quoted in the last chapter. He even takes over the
German thesis, originated by Friedrich List, that Free Trade
was a policy dictated solely by, and appropriate only to, the special
interests of England in the nineteenth century. Now, however,
“ the artificial production of some degree of autarky is a necessary
condition of orderly social existence ”. To bring about a “ return
to a more dispersed and generalised world trade ... by a
‘ removal of trade barriers ’ or by a resuscitation of the laissez-

the totalitarians in our midst 141

jaire principles of the nineteenth century ” is “ unthinkable
The future belongs to Grossraumwirtschaft of the German kind :
“ the result which we desire can be won only by a deliberate
reorganisation of European life such as Hitler has undertaken ” !

After all this one is hardly surprised to find a characteristic
section headed “ The Moral Functions of War ”, in which Pro-
fessor Carr condescendingly pities “ the well-meaning people
(especially in English-speaking countries) who, steeped in the
nineteenth-century tradition, persist in regarding war as senseless
and devoid of purpose ”, and rejoices in the “ sense of meaning
and purpose ” which war, “ the most powerful instrument of
social solidarity ”, creates. This is all very familiar — but it was
not in the works of English scholars that one expected to find
these views.

* * # # #

Possibly we have not yet given enough attention to one
feature of the intellectual development in Germany during the
last hundred years which is now in an almost identical form
making its appearance in this country : the scientists agitating
for a “ scientific ” organisation of society. The ideal of a society
organised “ through and through ” from the top has in Germany
been considerably furthered by the quite unique influence which
her scientific and technological specialists were allowed to exercise
on the formation of social and political opinions. Few people
remember that in the modern history of Germany the political
professors have played a role comparable to that of the political
lawyers in France. 1 The influence of these scientist-politicians
was of late years not often on the side of liberty : the “ intoler-
ance of reason ” so frequently conspicuous in the scientific
specialist, the impatience with the ways of the ordinary man so
characteristic of the expert, and the contempt for anything which
was not consciously organised by superior minds according to a
scientific blueprint, were phenomena familiar in German public
life for generations before they became of significance in this
country. And perhaps no other country provides a better illus-
tration of the effects on a nation of a general and thorough shift
of the greater part of its educational system from the “ human-
ities ” to the “ realities ” than Germany between 1840 and 1940. 2

The way in which, in the end, with few exceptions, her scholars
and scientists put themselves readily at the service of the new
rulers is one of the most depressing and shameful spectacles in

1 Cf. Franz Schnabel, Deutsche Geschichte im neunzehnten Jahrhundert, vol. II,
1933, p. 204.

2 I believe it was the author of Leviathan who first suggested that the
teaching of the classics should be suppressed, because it instilled a dangerous,
spirit of liberty 1

142 THE ROAD TO SERFDOM

the whole history of the rise of National-Socialism . 1 It is well
known that particularly the scientists and engineers, who had so
loudly claimed to be the leaders on the march to a new and better
world, submitted more readily than almost any other class to the
new tyranny . 2

The role which the intellectuals played in the totalitarian trans-
formation of society was prophetically foreseen in another country
by Julien Benda, whose Trahison des Clercs assumes new signific-
ance when one now re-reads it, fifteen years after it has been
written. There is particularly one passage in that work which
deserves to be well pondered and kept in mind when we come to
consider certain examples of the excursions of British scientists
into politics. It is the passage in which M. Benda speaks of the

superstition of science held to be competent in all domains, including
that of morality ; a superstition which, I repeat, is an acquisition
of the nineteenth century. It remains to discover whether those
who brandish this doctrine believe in it or whether they simply
want to give the prestige of a scientific appearance to passions of
their hearts, which they perfectly know are nothing but passions.
It is to be noted that the dogma that history is obedient to scientific
laws is preached especially by partisans of arbitrary authority. This
is quite natural, since it eliminates the two realities they most hate,
i.e. human liberty and the historical action of the individual.

We have already had occasion to mention one English product
of this kind, a work in which, on a Marxist background, all the

1 The servility of the scientists to the powers that be appeared early in
Germany, hand in hand with the great development of state-organised science
which to-day is the subject of so much eulogy in this country. One of the
most famous of German scientists, the physiologist Emil du Bois-Reymond,
was not ashamed, in an oration delivered in 1870 in his double capacity of
Rector of the University of Berlin and President of the Prussian Academy of
Science, to proclaim that “ We, the University of Berlin, quartered opposite
the King’s palace, are, by the deed of our foundation, the intellectual bodyguard
of the House of Hohenzollem.” (.4 Speech on the German War, London 1870,
p. 31. — It is remarkable that du Bois-Reymond should have thought it advisable
to issue an English edition of this oration.)

1 It will suffice to quote one foreign witness : Mr. R. A. Brady, in his
study of The Spirit and Structure of German Fascism, concludes his detailed
account of the development in the German academic world with the statement
that “ the scientist, per se, is hence, perhaps, the most easily used and ‘ co-
ordinated ’ of all the especially trained people in modem society. The Nazis,
to be true, fired a good many University professors, and dismissed a good many
scientists from research laboratories. But the professors were primarily among
the social sciences where there was more common awareness of and a more
persistent criticism of the Nazi programmes, and not among the natural sciences
where thinking is supposed to be most rigorous. Those dismissed in this
latter field were primarily Jewish or exceptions to the generalisations made
above, because of the equally uncritical acceptance of beliefs running contrary
to Nazi views. — Consequently the Nazis were able to ‘ co-ordinate ’ scholars
and scientists with relative ease, and hence to throw behind their elaborate
propaganda the seeming weight of the bulk of German learned opinion and
support.”

THE TOTALITARIAN IN OUR MIDST 1 43

characteristic idiosyncrasies of the totalitarian intellectual, a
hatred of almost everything which distinguishes European
civilisation since the Renaissance, is combined with an approval
of the methods of Inquisition. We do not wish to consider here
such an extreme case and shall take a work which is more repre-
sentative and which has achieved considerable publicity. Dr.
C. H. Waddington’s little book under the characteristic title
The Scientific Attitude is as good an example as any of a class
of literature which is actively sponsored by the influential weekly
Nature and which combines claims for greater political power
for the scientists with an ardent advocacy of wholesale
“ planning ”. Though not quite as outspoken in his contempt
for freedom as Mr. Growther, Dr. Waddington is hardly more
reassuring. He differs from most of the writers of the same
kind in that he clearly sees and even emphasises that the ten-
dencies he describes and supports inevitably lead to a totalitarian
system. Yet apparently this appears to him preferable to what
he describes as “ the present ferocious monkey-house civilisation ”.

Dr. Waddington’s claim that the scientist is qualified to run a
totalitarian society is based mainly on his thesis that “ science
can pass ethical judgment on human behaviour ”, a claim to the
elaboration of which by Dr. Waddington Nature has given con-
siderable publicity. It is, of course, a thesis which has long been
familiar to the German scientist-politicians and which has justly
been singled out by J. Benda. For an illustration of what this
means we do not need to go outside Dr. Waddington’s book.
Freedom, he explains, “ is a very troublesome concept for the
scientist to discuss, partly because he is not convinced that, in
the last analysis, there is such a thing ”. Nevertheless we are
told that “ science recognises ” this and that kind of freedom,
but “ the freedom to be odd and unlike one’s neighbour is not
... a scientific value Apparently the “ harlot humanities ”,
about which Dr. Waddington has to say many uncomplimentary
things, have gravely misled us in teaching us tolerance !

That when it comes to social and economic questions this book
on the “ scientific attitude ” is anything but scientific is what
one has learnt to expect of this kind of literature. We find again
all the familiar cliches and baseless generalisations about “ poten-
tial plenty ” and the inevitable tendency towards monopoly,
though the “ best authorities ” quoted in support of these con-
tentions prove on examination to be mostly political tracts of
questionable scientific standing, while the serious studies of the
same problems are conspicuously neglected.

As in almost all works of this type, Dr. Waddington’s convic-
tions are largely determined by his belief in “ inevitable historical
tendencies ” which science is presumed to have discovered and

144 THE R0AD T0 SERFDOM

which he derives from “ the profound scientific philosophy ” of
Marxism whose basic notions are “ almost, if not quite, identical
with those underlying the scientific approach to nature ” and
which his “ competence to judge ” tells Dr. Waddington are an
advance on anything which has gone before. Thus Dr. Wad-
dington, though he finds it “ difficult to deny that England now
is a worse country to live in than it was ” in 1913, looks forward
to an economic system which “ will be centralised and totalitarian
in the sense that all aspects of the economic development of large
regions are consciously planned as an integrated whole And
for his facile optimism that in this totalitarian system freedom
of thought will be preserved, his “ scientific attitude ” has no
better counsel than the conviction that “ there must be very
valuable evidence about questions which one does not need to
be an expert to understand ”, such as, for example, whether it
Is possible “ to combine totalitarianism with freedom of
thought

*****

A fuller survey of the various tendencies towards totalitarianism
in this country would have to give considerable attention to the
various attempts to create some kind of middle-class socialism
bearing, no doubt unknown to their authors, an alarming resem-
blance to similar developments in pre-Hitler Germany. 1 If we
were concerned here with political movements proper we should
have to consider such new organisations as the “ Forward March ”
or “ Common Wealth ” movement of Sir Richard Acland, the
author of Unser Kampf, or the activities of the “ 1941 Committee ”
of Mr. J. B. Priestley, at one time associated with the former.
But, though it would be unwise to disregard the symptomatic
significance of such phenomena as these, they can hardly yet be
counted as important political forces. Apart from the intellectual
influences which we have illustrated by two instances, the impetus
of the movement towards totalitarianism comes mainly from the
two great vested interests, organised capital and organised labour.
Probably the greatest menace of all is the fact that the policies
of these two most powerful groups point in the same direction.

They do this through their common, and often concerted,

1 Another element which after this war is likely to strengthen the tendencies
in this direction will be some of the men who during the war have tasted the
powers of coercive control and will find it difficult to reconcile themselves
with the humbler roles they will then have to play. Though after the last
war men of this kind were not as numerous as they will probably be in the
future, they exercised even then a not inconsiderable influence on the economic
policy of this country. It was in the company of some of these men that as
long as ten or twelve years ago I first experienced in this country the then
still unusual sensation of being suddenly transported into what I had learnt
to regard as a thoroughly “ German ” intellectual atmosphere.

THE TOTALITARIAN IN OUR MIDST 145

support of the monopolistic organisation of industry ; and it is
this tendency which is the great immediate danger. While there
is no reason to believe that this movement is inevitable, there
can be little doubt that if we continue on the path we have been
treading, it will lead us to totalitarianism.

This movement is, of course, deliberately planned mainly by
the capitalist organisers of monopolies, and they are thus one of
the main sources of this danger. Their responsibility is not
altered by the fact that their aim is not a totalitarian system but
rather a sort of corporative society in which the organised indus-
tries would appear as semi-independent and self-governing
“ estates ”. But they are as short-sighted as were their German
colleagues in believing that they will be allowed not only to
create but also for any length of time to run such a system. The
decisions which the managers of such an organised industiy
would constantly have to make are not decisions which any society
will long leave to private individuals. A state which allows such
enormous aggregations of power to grow up cannot afford to let
this power rest entirely in private control. Nor is the belief any
less illusory that in such conditions the entrepreneurs will be long
allowed to enjoy the favoured position which in a competitive
society is justified by the fact that of the many who take the risks
only a few achieve the success the chances of which make the
risk worth taking. It is not surprising that entrepreneurs should
like to enjoy both the high income which in a competitive society
the successful ones among them gain, and the security of the
civil servant. So long as a large sector of private industry exists
side by side with the government-run industry great industrial
talent is likely to command high salaries even in fairly secure
positions. But while the entrepreneurs may well see their
expectations borne out during a transition stage, it will not be
long before they will find, as their German colleagues did, that
they are no longer masters but will in every respect have to
be satisfied with whatever power and emoluments the govern-
ment will concede them.

Unless the argument of this book has been completely mis-
understood, the author will not be suspected of any tenderness
towards the capitalists if he stresses here that it would nevertheless
be a mistake to put the blame for the modem movement towards
monopoly exclusively or mainly on that class. Their propensity
in this direction is neither new nor would it by itself be likely to
become a formidable power. The fatal development was that
they have succeeded in enlisting the support of an ever-increasing
number of other groups and with their help to obtain the support
of the state.

In some measure the monopolists' have gained this support

146 THE ROAD TO SERFDOM

either by letting other groups participate in their gains or, and
perhaps even more frequently, by persuading them that the
formation of monopolies was in the public interest. But the
change in public opinion which through its influence on legis-
lation and judicature 1 has been the most important factor to
make this development possible, is more than anything the result
of the propaganda against competition by the Left. Very fre-
quently even measures aimed against the monopolists in fact
serve only to strengthen the power of monopoly. Every raid
on the gains of monopoly, be it in the interest of particular groups
or of the state as a whole, tends to create new vested interests
which will help to bolster up monopoly. A system in which
large privileged groups profit from the gams of monopoly may
be politically much more dangerous, and monopoly in such a
system certainly is much more powerful, than in one where the
profits go to a limited few. But though it should be clear that,
for example, the higher wages which the monopolist is in a
position to pay are just as much the result of exploitation as his
own profit, and are just as certain to make poorer not only all
the consumers but still more all other wage earners, not merely
those who benefit from it but the public generally nowadays
accept the ability to pay higher wages as a legitimate argument
in favour of monopoly. 2

There is serious reason for doubt whether even in those cases
where monopoly is inevitable the best way of controlling it is to
put it in the hands of the state. If only a single industry were in
question this might well be so. But when we have to deal with
many different monopolistic industries, there is much to be said
for leaving them in different private hands rather than combining
them under the single control of the state. Even if railways,
road and air transport, or the supply of gas and electricity, were
all inevitably monopolies, the consumer is unquestionably in a
much stronger position so long as they remain separate mono-
polies than when they are “ co-ordinated ” by a central control.
Private monopoly is scarcely ever complete and even more rarely
of long duration or able to disregard potential competition. But
a state monopoly is always a state-protected monopoly — pro-
tected against both potential competition and effective criticism.

1 Cf. on this the recent instructive article on “ Monopoly and the Law ”, by
W. Arthur Lewis, in The Modern Law Review, vol. VI, no. 3, April 1943.

2 Even more surprising, perhaps, is the remarkable tenderness which many
socialists are apt to show towards the rentier bondholder to whom monopolist
organisation of industry frequently guarantees secure incomes. That their
blind enmity to profits should lead people to represent effortless fixed income
as socially or ethically more desirable than profits, and to accept even monopoly
to secure such a guaranteed income to, for example, railway bondholders, is
one of the most extraordinary symptoms of the perversion of values which has
taken place during the last generation.

THE TOTALITARIANS IN OUR MIDST

H7

It means in most instances that a temporary monopoly is given
the power to secure its position for all time — a power almost
certain to be used. Where the power which ought to check and
control monopoly becomes interested in sheltering and defending
its appointees, where for the government to remedy an abuse is
to admit responsibility for it, and where criticism of the actions
of monopoly means criticism of the government, there is little
hope of monopoly becoming the servant of the community. A
state which is entangled in all directions in the running of mono-
polistic enterprise, while it would possess crushing power over
the individual, would yet be a weak state in so far as its freedom
in formulating policy is concerned. The machinery of monopoly .
becomes identical with the machinery of the state, and the state
itself becomes more and more identified with the interests of
those who run things than with the interests of the people in
general.

The probability is that wherever monopoly is really inevitable
the plan which used to be preferred by the Americans, of a strong
state control over private monopolies, if consistently pursued,
offers a better chance of satisfactory results than state manage-
ment. This would at least seem to be so where the state enforces
a stringent price control which leaves no room for extraordinary
profits in which others than the monopolists can participate.
Even if this should have the effect (as it sometimes had with
American public utilities) that the sendees of the monopolistic
industries would become less satisfactory than they might be,
this would be a small price to pay for an effective check on the
powers of monopoly. Personally I should much prefer to have *
to put up with some such inefficiency than have organised
monopoly control my ways of life. Such a method of dealing
with monopoly, which would rapidly make the position of the
monopolist the least eligible among entrepreneurial positions,
would also do as much as anything to reduce monopoly to the
spheres where it is inevitable and to stimulate the invention of
substitutes which can be provided competitively. Only make
the position of the monopolist once more that of the whipping
boy of economic policy and you will be surprised how quickly
most of the abler entrepreneurs will rediscover their taste for
the bracing air of competition !

* # * * #

The problem of monopoly would not be as difficult as it is if
it were only the capitalist monopolist whom we have to fight.
But, as has already been said, monopoly has become the danger
that it is, not through the efforts of a few interested capitalists, t
but through the support they have obtained from those whom

148 THE ROAD TO SERFDOM

they have let share in their gains, and from the many more whom
they have persuaded that in supporting monopoly they assist
in the creation of a more just and orderly society. The fatal
turning point in the modern development was when the great
movement which can serve its original ends only by fighting all
privilege, the Labour Movement, came under the influence of
anti-competition doctrines and became itself entangled in the
strife for privilege. The recent growth of monopoly is largely
the result of a deliberate collaboration of organised capital and
organised labour where the privileged groups of labour share
in the monopoly profits at the expense of the community and
particularly at the expense of the poorest, those employed in the
less well organised industries and the unemployed.

It is one of the saddest spectacles of our time to see a great
democratic movement support a policy which must lead to the
destruction of democracy and which meanwhile can benefit only
a minority of the masses who support it. Yet it is this support
from the Left of the tendencies towards monopoly which make
them so irresistible and the prospects of the future so dark. So
long as Labour continues to assist in the destruction of the only
order under which at least some degree of independence and
freedom has been secured to every worker, there is indeed little
hope for the future. The Labour leaders who now proclaim so
loudly that they have “ done once and for all with the mad com-
petitive system ” 1 are proclaiming the doom of the freedom of
the individual. There is no other possibility than either the
order governed by the impersonal discipline of the market or
that directed by the will of a few individuals ; and those who
are out to destroy the first are wittingly or unwittingly helping
to create the second. Even though some workmen will perhaps
be better fed, and all will no doubt be more uniformly dressed in
that new order, it is permissible to doubt whether the majority of
English workmen will in the end thank the intellectuals among
their leaders who have presented them with a socialist doctrine
which endangers their personal freedom.

To anyone who is familiar with the history of the major Con-
tinental countries in the last twenty-five years, the study of the
recent programme of the Labour Party, now committed to the
creation of a “ planned society ” is a most depressing experience.
To “ any attempt to restore traditional Britain ” there is opposed
a scheme which not only in general outline but also in detail
and even wording is indistinguishable from the socialist dreams

1 Professor H. J. Laski, in his address to the 41st Annual Labour Party
Conference, London, May 26, 1942 ( Report , p. in). It deserves to be noted
that according to Professor Laski it is “ this mad competitive system which
spells poverty for all peoples, and war as outcome of that poverty ” — a curious
reading of the history of the last hundred and fifty years.

THE TOTALIT ASIANS IN OUR MIDST 1 49

which dominated German discussion twenty-five years ago.
Not only demands, like those of the resolution, adopted on Pro-
fessor Laski’s motion, which requires the retention in peace time
of the “ measures of Government control needed for mobilising
the national resources in war ”, but all the characteristic catch-
words, such as the “ balanced economy ” which Professor Laski
now demands for Great Britain, or the “ community consump-
tion ” towards which production is to be centrally directed, are
bodily taken over from the German ideology. Twenty-five years
ago there was perhaps still some excuse for holding the naive
belief “ that a planned society can be a far more free society than
the competitive laissez-faire order it has come to replace ’k 1
But to find it once more held after twenty-five years of experience
and the re-examination of the old beliefs to which this experience
has led, and at a time when we are fighting the results of those
very doctrines, is tragic beyond words. That the great party
which in Parliament and public opinion has largely taken the
place of the progressive parties of the past, should have ranged
itself with what, in the light of all past development, must be
regarded as a reactionary movement, is the decisive change which
has taken place in our time and the source of the mortal danger
to everything a liberal must value. That the advances of the past
should be threatened by the traditionalist forces of the Right is
a phenomenon of all ages which need not alarm us. But if the
place of the opposition, in public discussion as well as in Parlia-
ment, should become lastingly the monopoly of a second reaction-
ary party, there would indeed be no hope left.

1 The Old World and the New Society, an Interim Report of the National
Executive of the British Labour Patty on the Problems of Reconstruction,
pp. 12 and 16.

CHAPTER XIV

MATERIAL CONDITIONS AND IDEAL ENDS

Is it just or reasonable, that most voices against the main end
of government should enslave the less number that would be
free ? More just it is, doubtless, if it come to force, that a less
number compel a greater to retain, which can be no wrong to
them, their liberty, than that a greater number, for the pleasure
of their baseness, compel a less most injuriously to be their
fellow slaves. They who seek nothing but their own just
liberty, have always the right to win it, whenever they have the
power, be the voices never so numerous that oppose it.

John Milton.

OUR generation likes to flatter itself that it attaches less weight
to economic considerations than did its parents or grandparents.
The “ End of Economic Man ” bids fair to become one of the
governing myths of our age. Before we accept this claim, or
treat the change as praiseworthy, we must inquire a little further
how far it is true. When we consider the claims for social recon-
struction which are most strongly pressed it appears that they are
almost all economic in character : we have seen already that the
“ re-interpretation in economic terms ” of the political ideals of
the past, of liberty, equality, and security, is one of the main
demands of people who at the same time proclaim the end of
economic man. Nor can there be much doubt that in their
beliefs and aspirations men are to-day more than ever before
governed by economic doctrines, by the carefully fostered belief
in the irrationality of our economic system, by the false assertions
about “ potential plenty ”, pseudo-theories about the inevitable
trend towards monopoly, and the impression created by certain
much advertised occurrences such as the destruction of stocks
of raw materials or the suppression of inventions, for which
competition is blamed, though they are precisely the sort of
thing which could not happen under competition and which are
made possible only by monopoly and usually by government-
aided monopoly . 1

In a different sense, however, it is no doubt true that our

1 The frequent use that is made of the occasional destruction of wheat, coffee,
etc., as an argument against competition is a good illustration of the intellectual
dishonesty of much of this argument, since a little reflection will show that in
a competitive market no owner of such stocks can gain by their destruction.
The case of the alleged suppression of useful patents is more complicated and
cannot be adequately discussed in a note ; but the conditions in which it would
be profitable to put into cold storage a patent which in the social interest ought
to be used are so exceptional that it is more than doubtful whether this has
happened in any important instance.

^ 5 °

MATERIAL CONDITIONS AND IDEAL ENDS 151

generation is less willing to listen to economic considerations
than was true of its predecessors. It is most decidedly unw illin g
to sacrifice any of its demands to what are called economic
arguments, it is impatient and intolerant of all restraints on their
immediate ambitions, and unwilling to bow to economic necessi-
ties. It is not any contempt for material welfare, or even any
diminished desire for it, but, on the contrary, a refusal to recognise
any obstacles, any conflict with other aims which might impede
the fulfilment of their own desires, which distinguishes our
generation. Economophobia would be a more correct description
of this attitude than the doubly misleading “ End of Economic
Man ”, which suggests a change from a state of affairs which has
never existed in a direction in which we are not moving. Man 0
has come to hate, and to revolt against, the impersonal forces
to which in the past he submitted even though they have often
frustrated his individual efforts.

This revolt is an instance of a much more general phenomenon,
a new unwillingness to submit to any rule or necessity the rationale
of which man does not understand ; it makes itself felt in many
fields of life, particularly in that of morals ; and it is often a
commendable attitude. But there are fields where this craving
for intelligibility cannot be fully satisfied and where at the same
time a refusal to submit to anything we cannot understand must
lead to the destruction of our civilisation. Though it is natural
that, as the world around us becomes more complex, our resistance
grows against the forces which, without our understanding them,
constantly interfere with individual hopes and plans, it is just
in these circumstances that it becomes less and less possible for
anyone fully to understand these forces. A complex civilisation
like ours is necessarily based on the individual adjusting himself
to changes whose cause and nature he cannot understand : why
he should have more or less, why he should have to move to
another occupation, why some things he wants should become
more difficult to get than others, will always be connected with
such a multitude of circumstances that no single mind will be
able to grasp them ; or, even worse, those affected will put all
the blame on an obvious immediate and avoidable cause, while
the more complex interrelationships which determine the change
remain inevitably hidden to them. Even the director of a com-
pletely planned society, if he wanted to give an adequate explana-
tion to anyone why he has to be directed to a different job, or why
his remuneration has to be changed, could not fully do so without
explaining and vindicating his whole plan — which means, of
course, that it could not be explained to more than a few.

It was men’s submission to the impersonal forces of the market
that in the past has made possible the growth of a civilisation •

152 THE ROAD TO SERFDOM

which without this could not have developed ; it is by thus
submitting that we are every day helping to build something that
is greater than anyone of us can fully comprehend. It does not
matter whether men in the past did submit from beliefs which
some now regard as superstitious : from a religious spirit of
humility, or an exaggerated respect for the crude teachings of the
early economists. The crucial point is that it is infinitely more
difficult rationally to comprehend the necessity of submitting to
forces whose operation we cannot follow in detail, than to do so
out of the humble awe which religion, or even the respect for
the doctrines of economics, did inspire. It may indeed be the
case that infinitely more intelligence on the part of everybody
would be needed than anybody now possesses, if we were even
merely to maintain our present complex civilisation without
anybody having to do things of which he does not comprehend
the necessity. The refusal to yield to forces which we neither
understand nor can recognise as the conscious decisions of an
intelligent being is the product of an incomplete and therefore
erroneous rationalism. It is incomplete because it fails to compre-
hend that the co-ordination of the multifarious individual efforts
in a complex society must take account of facts no individual can
completely survey. And it fails to see that, unless this complex
society is to be destroyed, the only alternative to submission to
the impersonal and seemingly irrational forces of the market is
submission to an equally uncontrollable and therefore arbitrary
power of other men. In his anxiety to escape the irksome
restraints which he now feels, man does not realise that the new
authoritarian restraints which will have to be deliberately imposed
in their stead will be even more painful.

Those who argue that we have to an astounding degree learned
to master the forces of nature but are sadly behind in making
successful use of the possibilities of social collaboration are quite
right so far as this statement goes. But they are mistaken when
they carry the comparison further and argue that we must learn
to master the forces of society in the same manner in which we
have learnt to master the forces of nature. This is not only the
path to totalitarianism, but the path to the destruction of our
civilisation and a certain way to block future progress. Those
who demand it show by their very demands that they have not
yet comprehended the extent to which the mere preservation of
what we have so far achieved depends on the co-ordination of
individual efforts by impersonal forces.

*****

We must now return briefly to the crucial point, that individual
freedom cannot be reconciled with the supremacy of one single

MATERIAL CONDITIONS AND IDEAL ENDS 1 53

purpose to which the whole society must be entirely and per-
manently subordinated. The only exception to the rule that a
free society must not be subjected to a single purpose is war and
other temporary disasters when subordination of almost everything
to the immediate and pressing need is the price at which we
preserve our freedom in the long run. This explains also why
so many of the fashionable phrases about doing for the purposes
of peace what we have learnt to do for the purposes of war are so
very misleading : it is sensible temporarily to sacrifice freedom in
order to make it more secure in the future ; but the same cannot
be said for a system proposed as a permanent arrangement.

That no single purpose must be allowed in peace to have
absolute preference over all others applies even to the one aim*
which everybody now agrees comes in the front rank : the
conquest of unemployment. There can be no doubt that this
must be the goal of our greatest endeavour ; even so, it does not
mean that such an aim should be allowed to dominate us to
the exclusion of everything else, that, as the glib phrase runs, it
must be accomplished “ at any price ”. It is, in fact, in this
field that the fascination of vague but popular phrases like “ full
employment ” may well lead to extremely short-sighted measures,
and where the categorical and irresponsible “ it must be done at
all cost ” of the single-minded idealist is likely to do the greatest
harm.

It is of very great importance that we should approach with
open eyes the task which in this field we shall have to face after
the war, and that we should clearly realise what we may hope to
achieve. One of the dominant features of the immediate post-war
situation will be that the special needs of war have drawn hundreds
of thousands of men and women into specialised jobs where
during the war they have been able to earn relatively high wages.
There will, in many instances, be no possibility of employing the
same numbers in these particular trades. There will be an urgent
need for the transfer of large numbers to other jobs, and many
of them will find that the work they can then get is less favourably
remunerated than was true of their war job. Even re-training,
which certainly ought to be provided on a liberal scale, cannot
entirely overcome this problem. There will still be many people
who, if they are to be paid according to what their services will
then be worth to society, would under any system have to be
content with a lowering of their material position relative to that
of others.

If, then, the trade unions successfully resist any lowering of
the wages of the particular groups in question, there will be only
two alternatives open : either coercion will have to be used, i.e.
certain individuals will have to be selected for compulsory transfer*

F

154 THE ROAD TO SERFDOM

to other and relatively less well paid positions, or those who can
no longer be employed at the relatively high wages they have
earned during the war must be allowed to remain unemployed
till they are willing to accept work at a relatively lower wage.
This is a problem which would arise in a socialist society no less
than in any other ; and the great majority of workmen would
probably be just as little inclined to guarantee in perpetuity their
present wages to those who were drawn into specially well paid
employments because of the special need of war. A socialist
society would certainly use coercion in this position. The point
that is relevant for us is that if we are determined not to allow
unemployment at any price, and are not willing to use coercion,
we shall be driven to all sorts of desperate expedients, none of
which can bring any lasting relief and all of which will seriously
interfere with the most productive use of our resources. It
should be specially noted that monetary policy cannot provide
a real cure for this difficulty except by a general and considerable
inflation, sufficient to raise all other wages and prices relatively
to those which cannot be lowered, and that even this would bring
about the desired result only by effecting in a concealed and under-
hand fashion that reduction of real wages which could not be
brought about directly. Yet to raise all other wages and incomes
to an extent sufficient to adjust the position of the group in
question would involve an inflationary expansion on such a scale
that the disturbances, hardships, and injustices caused would be
much greater than those to be cured.

This problem, which will arise in a particularly acute form
after the war, is one which will always be with us so long as the
economic system has to adapt itself to continuous changes. There
will always be a possible maximum of employment in the short
run which can be achieved by giving all people employment where
they happen to be and which can be achieved by monetary
expansion. But not only can this maximum be maintained solely
by progressive inflationary expansion and with the effect of holding
up those redistributions of labour between industries made
necessary by the changed circumstances, and which so long as
workmen are free to choose their jobs will always come about only
with some delays and thereby cause some unemployment : to
aim always at the maximum of employment achievable by
monetary means is a policy which is certain in the end to defeat
its own purposes. It tends to lower the productivity of labour
and thereby constantly increases the proportion of the working
population which can be kept employed at present wages only
by artificial means.

# # * • #

MATERIAL CONDITIONS AND IDEAL ENDS 1 55

There is little doubt that after the war wisdom in the manage-
ment of our economic affairs will be even more important than
before and that the fate of our civilisation will ultimately depend
on how we solve the economic problems we shall then face. We
shall at first be poor, very poor indeed — and the problem of
regaining and improving our former standards may in fact prove
for Great Britain more difficult than for many other countries.
If we act wisely there is little question that by hard work and by
devoting a considerable part of our efforts to overhauling and
renewing our industrial apparatus and organisation, we shall in
the course of a few years be able to return to, and even to surpass,
the level we had reached. But this presupposes that we shall be
satisfied to consume currently no more than is possible without*
impairing the task of reconstruction, that no exaggerated hopes
create irresistible claims for more than this, and that we regard
it as more important to use our resources in the best manner and
for the purposes where they contribute most to our well-being
than that we should use all our resources somehow . 1 Perhaps
no less important is that we should not, by short-sighted attempts
to cure poverty by a redistribution instead of by an increase in
our income, so depress large classes as to turn them into deter-
mined enemies of the existing political order. It should never
be forgotten that the one decisive factor in the rise of totalitarianism
on the Continent, which is yet absent in this country, is the exist-
ence of a large recently dispossessed middle class.

Our hopes of avoiding the fate which threatens must indeed to
a large extent rest on the prospect that we can resume rapid
economic progress which, however low we may have to start,
will continue to carry us upwards ; and the main condition for
such progress is that we should all be ready to adapt ourselves
quickly to a very much changed world, that no considerations for
the accustomed standard of particular groups must be allowed to
obstruct this adaptation, and that we learn once more to turn all
our resources to wherever they contribute most to make us all
richer. The adjustments that will be needed if we are to recover
and surpass our former standards will be greater than any similar
adjustments we had to make in the past ; and only if every one
of us is ready individually to obey the necessities of this readjust-
ment shall we be able to get through a difficult period as free

1 This is perhaps the place to emphasise that, however much one may wish
a speedy return to a free economy, this cannot mean the removal at one stroke
of most of the wartime restrictions. Nothing would discredit the system of
free enterprise more than the acute, though probably short-lived, dislocation
and instability such an attempt would produce. The problem is at what kind
of system we should aim in the process of demobilisation, not whether the war-
time system should be transformed into more permanent arrangements by
a carefully thought-out policy of gradual relaxation of controls, which maj4
have to extend over several years.

156 THE ROAD TO SERFDOM

men who can choose their own way of life. Let a uniform
minimum be secured to everybody by all means ; but let us
admit at the same time that with this assurance of a basic minimum
all claims for a privileged security of particular classes must lapse,
that all excuses disappear for allowing groups to exclude new-
comers from sharing their relative prosperity in order to maintain
a special standard of their own.

It may sound noble to say : damn economics, let us build up
a decent world — but it is, in fact, merely irresponsible. With our
world as it is, with everyone convinced that the material conditions
here or there must be improved, our only chance of building a
decent world is that we can continue to improve the general level
of wealth. The one thing modern democracy will not bear with-
out cracking is the necessity of a substantial lowering of the
standards of living in peace time or even prolonged stationariness
of its economic conditions.

# * * # #

People who admit that present political trends constitute a
serious threat to our economic prospects, and through their
economic effects endanger much higher values, are yet apt to
deceive themselves that we are making material sacrifices to gain
ideal ends. It is, however, more than doubtful whether a fifty
years’ approach towards collectivism has raised our moral
standards, or whether the change has not rather been in the
opposite direction. Though we are in the habit of priding
ourselves on our more sensitive social conscience, it is by no means
clear that this is justified by the practice of our individual conduct.
On the negative side, in its indignation about the inequities of the
existing social order, our generation probably surpasses most of
its predecessors. But the effect of that movement on our positive
standards in the proper field of morals, individual conduct, and
on the seriousness with which we uphold moral principles against
the expediencies and exigencies of social machinery, is a very
different matter.

Issues in this field have become so confused that it is necessary
to go back to fundamentals. What our generation is in danger
of forgetting is not only that morals are of necessity a phenomenon
of individual conduct, but also that they can exist only in the
sphere in which the individual is free to decide for himself and
called upon voluntary to sacrifice personal advantage to the
observance of a moral rule. Outside the sphere of individual
responsibility there is neither goodness, nor badness, neither
opportunity for moral merit nor the chance of proving one’s con-
viction by sacrificing one’s desires to what one thinks right.
'Only where we ourselves are responsible for our own interests

MATERIAL CONDITIONS AND IDEAL ENDS 1 57

and are free to sacrifice them, has our decision moral value. We
are neither entitled to be unselfish at someone else’s expense, nor
is there any merit in being unselfish if we have no choice. The
members of a society who in all respects are made to do the good
thing have no title to praise. As Milton said : “ If every action
which is good or evil in a man of ripe years were under pittance
and prescription and compulsion, what were virtue but a name,
what praise should then be due to well-doing, what gramercy
to be sober, just, or continent ? ”

Freedom to order our own conduct in the sphere where material
circumstances force a choice upon us, and responsibility for the
arrangement of our own life according to our own conscience, is
the air in which alone moral sense grows and in which moral
values are daily re-created in the free decision of the individual.
Responsibility, not to a superior, but to one’s conscience, the
awareness of a duty not exacted by compulsion, the necessity to
decide which of the things one values are to be sacrificed to others,
and to bear the consequences of one’s own decision, are the very
essence of any morals which deserve the name.

That in this sphere of individual conduct the effect of col-
lectivism has been almost entirely destructive, is both inevitable
and undeniable. A movement whose main promise is the
relief from responsibility 1 cannot but be anti-moral in its effect,
however lofty the ideals to which it owes its birth. Can there be
much doubt that the feeling of personal obligation to remedy in-
equities, where our individual power permits, has been weakened
rather than strengthened, that both the willingness to bear
responsibility and the consciousness that it is our own individual
duty to know how to choose have been perceptibly impaired ?
There is all the difference between demanding that a desirable
state of affairs should be brought about by the authorities or
even being willing to submit provided everyone else is made to
do the same, and the readiness to do what one thinks right oneself
at the sacrifice of one’s own desires and perhaps in the face of
hostile public opinion. There is much to suggest that we have

1 This becomes more and more clearly expressed as socialism approaches
totalitarianism, and in this country is most explicitly stated in the programme
of that latest and most totalitarian form of English socialism, Sir Richard
Acland’s “ Common- Wealth ” movement. The main feature of the new order
he promises is that in it the community will “ say to the individual ‘ Don’t you
bother about the business of getting your own living In consequence, of
course, “ it must be the community as a whole which must decide whether or
not a man shall be employed upon our resources, and how and when and in
what manner he shall work ”, and that the community will have “ to run
camps for shirkers in very tolerable conditions ”. Is it surprising that the
author discovers that Hitler “ has stumbled across (or has needed to make use
of) a small part, or perhaps one should say one particular aspect of, what will
ultimately be required of humanity ” ? (Sir Richard Acland, Bt., The Forward
March, 1941, pp. 127, 126, 135, and 32).

158 THE ROAD TO SERFDOM

in fact become more tolerant towards particular abuses, and much
more indifferent to inequities in individual cases, since we have
fixed our eyes on an entirely different system in which the state
will set everything right. It may even be, as has been suggested,
that the passion for collective action is a way in which we now
without compunction collectively indulge in that selfishness which
as individuals we had learnt a little to restrain.

It is true that the virtues which are less esteemed and practised
now — independence, self-reliance, and the willingness to bear
risks, the readiness to back one’s own conviction against a majority,
and the willingness to voluntary co-operation with one’s neigh-
bours — are essentially those on which the working of an indi-
vidualist society rests. Collectivism has nothing to put in their
place, and in so far as it has already destroyed them it has left
a void filled by nothing but the demand for obedience and the
compulsion of the individual to do what is collectively decided
to be good. The periodical election of representatives, to which
the moral choice of the individual tends to be more and more re-
duced, is not an occasion on which his moral values are tested or
where he has constantly to reassert and prove the order of his
values, and to testify to the sincerity of his profession by the sacri-
fice of those of his values he rates lower to those he puts higher.

As the rules of conduct evolved by individuals are the source
from which collective political action derives what moral standards
it possesses, it would indeed be surprising if the relaxation of
the standards of individual conduct were accompanied by a
raising of the standards of social action. That there have been
great changes is clear. Every generation, of course, puts some
values higher and some lower than its predecessors. Which,
however, are the aims which take a lower place now, which are
the values which we are now warned may have to give way if
they come into conflict with others ? Which kind of values
figure less prominently in the picture of the future held out to
us by the popular writers and speakers than they did in the dreams
and hopes of our fathers ? It is certainly not material comfort,
certainly not a rise in our standard of living or the assurance of
a certain status in society which ranks lower. Is there a popular
writer or speaker who dares to suggest to the masses that they
might have to make sacrifices of their material prospects for the
enhancement of an ideal end ? Is it not, in fact, entirely the
other way round ? Are not the things which we are more
and more frequently taught to regard as “ nineteenth-century
illusions ” all moral values — liberty and independence, truth and
intellectual honesty, peace and democracy, and the respect for
the individual qua man instead of merely as the member of an
organised group ? What are the fixed poles now which are

MATERIAL CONDITIONS AND IDEAL ENDS 1 59

regarded as sacrosanct, which no reformer dare touch, since they
are treated as the immutable boundaries which must be respected
in any plan for the future ? They are no longer the liberty of
the individual, his freedom of movement, and scarcely that of
speech. They are the protected standards of this or that group,
their “ right ” to exclude others from providing their fellow-men
with what they need. Discrimination between members and
non-members of closed groups, not to speak of nationals of
different countries, is accepted more and more as a matter of
course ; injustices inflicted on individuals by government action
in the interest of a group are disregarded with an indifference
hardly distinguishable from callousness ; and the grossest viola *
tions of the most elementary rights of the individual, such as are
involved in the compulsory transfer of populations, are more and
more often countenanced even by supposed liberals. All this
surely indicates that our moral sense has been blunted rather than
sharpened. When we are reminded, as more and more frequently
happens, that one cannot make omelettes without breaking eggs,
the eggs which are broken are almost all of the kind which a
generation or two ago were regarded as the essential bases of
civilised life. And what atrocities committed by powers with
whose professed principles they sympathise have not been readily
condoned by many of our so-called “ liberals ” ?

*****

There is one aspect of the change in moral values brought about
by the advance of collectivism which at the present time provides
special food for thought. It is that the virtues which are held
less and less in esteem and which consequently become rarer are
precisely those on which the British people justly prided them-
selves and in which they were generally recognised to excel. The
virtues possessed by the British people possessed in a higher
degree than most other people, excepting only a few of the
smaller nations, like the Swiss and the Dutch, were independence
and self-reliance, individual initiative and local responsibility,
the successful reliance on voluntary activity, non-interference with
one’s neighbour and tolerance of the different and queer, respect
for custom and tradition, and a healthy suspicion of power and
authority. British strength, British character, and British achieve-
ments are to a great extent the result of a cultivation of the
spontaneous. But almost all the traditions and institutions in
which British moral genius has found its most characteristic
expression, and which in turn have moulded the national character
and the whole moral climate of England, are those which the
progress of collectivism and its inherently centralistic tendencies
are progressively destroying.

l6o THE ROAD TO SERFDOM

A foreign background is sometimes helpful in seeing more
clearly to what circumstances the peculiar excellencies of the
moral atmosphere of a nation are due. And if one who, whatever
the law may say, must for ever remain a foreigner, may be allowed
to say so, it is one of the most disheartening spectacles of our
time to see to what extent some of the most precious things
which England has given to the world qxe now held in contempt
in England herself. The English hardly know to what degree
they differ from most other people in that they all, irrespective
of party, hold to a greater or less extent the ideas which in their
most pronounced form are known as liberalism. Compared with
most other peoples only twenty years ago almost all Englishmen
were liberals — however much they may have differed from party
Liberalism. And even to-day the English conservative or socialist,
no less than the liberal, if he travels abroad, though he may find
the ideas and writings of Carlyle or Disraeli, of the Webbs or
H. G. Wells, exceedingly popular in circles with which he has
little in common, among Nazis and other totalitarians, if he finds
an intellectual island where the tradition of Macaulay and
Gladstone, of J. S. Mill or John Morley lives, will find kindred
spirits who “ talk the same language ” as himself — however much
he himself may differ from the ideals for which these men
specifically stood.

Nowhere is the loss of the belief in the specific values of British
civilisation more manifest, and nowhere has it had a more
paralysing effect on the pursuit of our immediate great purpose
than in the fatuous ineffectiveness of most British propaganda.
The first prerequisite for success in propaganda directed to other
people is the proud acknowledgment of the characteristic values
and distinguishing traits for which the country attempting it is
known to the other peoples. The main cause of the ineffectiveness
of British propaganda is that those directing it seem to have lost
their own belief in the peculiar values of English civilisation or
to be completely ignorant of the main points on which it differs
from that of other people. The Left intelligentsia, indeed,
have so long worshipped foreign gods that they seem to have
become almost incapable of seeing, any good in the characteristic
English institutions and traditions. That the moral values on
which most of them pride themselves are largely the product of
the institutions they are out to destroy, these socialists cannot, of
course, admit. And this attitude is unfortunately not confined to
avowed socialists. Though one must hope that this is not true
of the less vocal but more numerous cultivated Englishmen, if
one were to judge by the ideas which find expression in current
political discussion and propaganda the Englishmen who not
only “ the language speak that Shakespeare spake ”, but also “ the

MATERIAL CONDITIONS AND IDEAL ENDS l6l

faith and morals hold that Milton held ” seem to have almost
vanished . 1 *

To believe, however, that the kind of propaganda produced
by this attitude can have the desired effect on our enemies and
particularly the Germans, is a fatal blunder. ’ The Germans
know this country, not well, perhaps, yet sufficiently to know
what are the characteristic traditional values of British life, and
what for the past two (Jr three generations has increasingly
separated the minds of the two countries. If we wish to convince
them, not only of our sincerity, but also that we have to offer
a real alternative to the way they have gone, it will not be by
concessions to their system of thought. We shall not delude
them with a stale reproduction of the ideas of their fathers which 3
we have borrowed from them — be it state-socialism, “ Real-
politik ”, “ scientific ” planning, or corporativism. We shall not
persuade them by following them half the way which leads to
totalitarianism, if the English themselves abandon the supreme
ideal of the freedom and happiness of the individual, if they
implicitly admit that their civilisation is not worth preserving,
and that they know nothing better than to follow the path along
which the Germans have led, they have indeed nothing to offer.
To the Germans all these are merely belated admissions that the
British have been wrong all the way through, and that they them-
selves are leading the way to a new and better world, however
appalling the period of transition may be. The Germans know
that what they still regard as the British tradition and their own
new ideals are fundamentally opposed and irreconcilable views
of life. They might be convinced that the way they have chosen
was wrong — but nothing will ever convince them that the British
will be better guides on the German path.

Least of all will that type of propaganda appeal to those Germans
on whose help we must ultimately count in rebuilding Europe
because their values are nearest to our own. For experience
has made them wiser and sadder men : they have learnt that
neither good intentions nor efficiency of organisation can preserve
decency in a system in which personal freedom and individual
responsibility are destroyed. What the German and Italian who
have learned the lesson above all want is protection against the
monster state — not grandiose schemes for organisation on a
colossal scale, but opportunity peacefully and in freedom to build

1 Though the subject of this chapter has already invited more than one

reference to Milton, it is difficult to resist the temptation to add here one more
quotation, a very familiar one, though one, it seems, which nowadays nobody

but a foreigner would dare to cite : “ Let not England forget her precedence
of teaching nations how to live.” It is, perhaps, significant that our generation
has seen a host of American and English detractors of Milton — and that the
first of them, Mr. Ezra Pound, was during this war broadcasting from Italy 1

1 62 THE ROAD TO SERFDOM

up once more his own little world. It is not because they believe
that to be ordered about by the British is preferable to being
ordered about by the Prussians, but because they believe that in
a world where British ideals have been victorious they will be
less ordered about and left in peace to pursue their own concerns,
that we can hope for support from some of the nationals of the
enemy countries.

If we are to succeed in the war of ideologies and to win over
the decent elements in the enemy countries, we must first of all
regain the belief in the traditional values for which this country
stood in the past, and must have the. moral courage stoutly to
defend the ideals which our enemies attack. Not by shamefaced
c apologies and by assurances that we are rapidly reforming, not
by explaining that we are seeking some compromise between the
traditional English values and the new totalitarian ideas, shall we
win confidence and support. Not the latest improvements we
may have effected in our social institutions, which count but little
compared with the basic differences of two opposed ways of life,
but our unwavering faith in those traditions which have made
this country a country of free and upright, tolerant and indepen-
dent people, is the thing that counts.

CHAPTER XV

THE PROSPECTS OF INTERNATIONAL ORDER

Of all checks on democracy, federation has been the most
efficacious and the most* congenial. . . . The federal system
limits and restrains the sovereign power by dividing it and by
assigning to Government only certain defined rights. It is
the only method of curbing not only the majority but the
power of the whole people. Lord Aaon

IN no other field has the world yet paid so dearly for the abandon-
ment of nineteenth-century liberalism as in the field where the
retreat began : in international relations. Yet only a small part
of the lesson which experience ought to have taught us has been
learnt. Perhaps even more than elsewhere current notions of
what is desirable and practicable are here still of a kind which
may well produce the opposite of what they promise.

The part of the lesson of the recent past which is slowly and
gradually being appreciated is that many kinds of economic
planning, conducted independently on a national scale, are bound
in their aggregate effect to be harmful even from a purely economic
point of view, and in addition to produce serious international
friction. That there is little hope of international order or lasting
peace so long as every country is free to employ whatever measures
it thinks desirable in its own immediate interest, however
damaging they may be to others, needs little emphasis now.
Many kinds of economic planning are indeed practicable only if
the planning authority can effectively shut out all extraneous
influences ; the result of such planning is therefore inevitably the
piling up of restrictions on the movements of men and goods.

Less obvious but by no means less real are the dangers to peace
arising out of the artificially fostered economic solidarity of all
the inhabitants of any one country, and from the new blocks
of opposed interests created by planning on a national scale. It
is neither necessary nor desirable that national boundaries
should mark sharp differences in standards of living, that mem-
bership of a national group should entitle to a share in a cake
altogether different from that in which members of other groups
share. If the resources of different nations are treated as
exclusive properties of these nations as wholes, if international
economic relations, instead of being relations between individuals,
become increasingly relations between whole nations organised as
trading bodies, they inevitably become the source of friction and
envy between whole nations. It is one of the most fatal illusions

163

164 the road to serfdom

that by substituting negotiations between states or organised
groups for competition for markets or for raw materials, inter-
national friction would be reduced. This would merely put a
contest of force in the place of what can only metaphorically be
called the “ struggle ” of competition, and transfer to powerful
and armed states, subject -to no superior law, the rivalries which
•between individuals had to be decided without recourse to force.
Economic transactions between natiohal bodies who are at the
same time the supreme judges of their own behaviour, who bow
to no superior law, and whose representatives cannot be bound
by any considerations but the immediate interest of their respec-
tive nations, must end in clashes of power. 1

If we were to make no better use of victory than to countenance
existing trends in this direction, only too visible before 1939,
we might indeed find that we have defeated National-Socialism
merely to create a world of many national socialisms, differing
in detail, but all equally totalitarian, nationalistic, and in recurrent
conflict with each other. The Germans would appear as the
disturbers of peace, as they already do to some people, 2 merely
because they were the first to take the path along which all the
others were ultimately to follow.

# # * # #

• Those who at least partly realise these dangers usually draw
the conclusion that economic planning must be done “ inter-
nationally ”, i.e. by some super-national authority. But though
this would avert some of the obvious dangers raised by planning
on a national scale, it seems that those who advocate such
ambitious schemes have little conception of the even greater
difficulties and dangers which their proposals create. The prob-
lems raised by a conscious direction of economic affairs on a
national scale inevitably assume even greater dimensions when the
same is attempted internationally. The conflict between planning
and freedom cannot but become more serious as the similarity
of standards and values among those submitted to a unitary
plan diminishes. There need be little difficulty in planning the
economic life of a family, comparatively little in a small com-
munity. But as the scale increases, the amount of agreement on
the order of ends decreases and the necessity to rely on force and
compulsion grows. In a small community common views on the
relative importance of the main tasks, agreed standards of value,
will exist on a great many subjects. But their number will

1 On all these and on the following points, which can be touched upon only
very briefly, see Professor Lionel Robbins’s Economic Planning and International
Order, 1937, passim.

« a See particularly the significant book by James Burnham, The Managerial
Revolution, 1941.

THE PROSPECTS OF INTERNATIONAL ORDER 1 65

become less and less the wider we throw the net : and as there
is less community of views, the necessity to rely on force and
coercion increases.

The people of any one country may easily be persuaded to
make a sacrifice in order to assist what they regard as “ their ”
iron industry or “ their ” agriculture, or in order that in their
country nobody should sink below a certain level. So long as it
is a question of helping people whose habits of life and ways of
thinking are familiar to us, of correcting the distribution of
incomes among, or the working conditions of, people we can well
imagine and whose views on their appropriate status are funda-
mentally similar to ours, we are usually ready to make some
sacrifices. But one has only to visualise the problems raised by
economic planning of even an area such as Western Europe to
see that the moral bases for such an undertaking are completely
lacking. Who imagines that there exist any common ideals of
distributive justice such as will make the Norwegian fisherman
consent to forgo the prospect of economic improvement in order
to help his Portuguese fellow, or the Dutch worker to pay more
for his bicycle to help the Coventry mechanic, or the French
peasant to pay more taxes to assist the industrialisation of Italy ?

If most people are not willing to see the difficulty this is mainly
because, consciously or unconsciously, they assume that it will
be they who will settle these questions for the others, and because
they are convinced of their own capacity to do this justly and
equitably. English people, perhaps even more than others, begin
to realise what such schemes mean only when it is presented to
them that they might be a minority in the planning authority,
and that the main lines of the future economic development of
Great Britain might be determined by a non-British majority.
How many people in this country would be prepared to submit
to the decision of an international authority, however demo-
cratically constituted, which had power to decree that the develop-
ment of the Spanish iron industry must have precedence over
similar development in South Wales, that the optical industry
had better be concentrated in Germany to the exclusion of Great
Britain, or that only fully refined petrol should be imported to
Great Britain and all the industries connected with refining
reserved for the producer countries ?

To imagine that the economic life of a vast area comprising
many different people can be directed or planped by democratic
procedure betrays a complete lack of awareness of the problems
such planning would raise. Planning on an international scale,
even more than is true on a national scale, cannot be anything
but a naked rule of force, an imposition by a small group on all^
the rest of that sort of standard and employment which the

1 66 the road to serfdom

planners think suitable for the rest. If anything is certain it is
that Grossraumwirtschaft of the kind at which the Germans have
been aiming can be successfully realised only by a master race,
a Herrenvolk, ruthlessly imposing its aims and ideas on the rest.
It is a mistake to regard the brutality and the disregard of all the
wishes and ideals of the smaller people shown by the Germans
simply as a sign of their special wickedness ; it is the nature of
the task they have assumed which makes these things inevitable.
To undertake the direction of the economic life of people with
widely divergent ideals and values is to assume responsibilities
which commit one to the use of force ; it is to assume a position
where the best intentions cannot prevent one from being forced
to act in a way which to some of those affected must appear
highly immoral . 1

This is true even if we assume the dominant power to be as
idealistic and unselfish as we can possibly conceive. But how
small is the likelihood that it will be unselfish, and how great are
the temptations ! I believe the standards of decency and fairness,
particularly with regard to international affairs, to be as high, if
not higher, in this than in any other country. Yet even now we
can hear people arguing that victory must be used to create condi-
tions in which British industry will be able to utilise to the full
the particular equipment which it has built up during the war,
that the reconstruction of Europe must be so directed as to fit in
with the special requirements of the industries of this country,
and to secure to everybody in this country the kind of employment
for which he thinks himself most fit. The alarming thing about
these suggestions is not that they are made, but that they are made
in all innocence and regarded as a matter of course by decent
people who are completely unaware of the moral enormity which
the use of force for such purposes involves . 2

# # # * *

1 The experience in the colonial sphere, of this country as much as of any
other, has amply shown that even the mild forms of planning which we know
as colonial development involve, whether we wish it or not, the imposition of
certain values and ideals on those whom we try to assist. It is, indeed, this
experience which has made even the most internationally minded of colonial
experts so very sceptical of the practicability of an “ international ” adminis-
tration of colonies.

a If anyone should still fail to see the difficulties, or cherish the belief that
with a little good will they can all be overcome, it will help if he tries to follow
the implications of central direction of economic activity applied on a world
scale. Can there be much doubt that this would mean a more or less conscious
endeavour to secure the dominance of the white man, and would rightly
be so regarded by all other races ? Till I find a sane person who seriously
believes that the European races will voluntarily submit to their standard of
life and rate of progress being determined by a World Parliament, I cannot
regard such plans as anything but absurd. But this does unfortunately not
•preclude that particular measures, which could be justified only if the principle
of world direction were a feasible ideal, are seriously advocated.

THE PROSPECTS OF INTERNATIONAL ORDER 1 67

Perhaps the most powerful agent in creating the belief in the
possibility of a single central direction by democratic means of
the economic life of many different peoples is the fatal delusion
that if the decisions were left to the “ people ”, the community
of interest of the working classes would readily overcome the
differences which exist between the ruling classes. There is
every reason to expect that with world planning the clash of
economic interests which arises now about the economic policy
of any one nation would in fact appear in even fiercer form as
a clash of interests between whole peoples which could be decided
only by force. On the questions which an international planning
authority would have to decide, the interests and opinions of the D
working classes of the different people will inevitably be as much
in conflict, and there will be even less of a commonly accepted
basis for an equitable settlement, than there is with respect to
different classes in any one country. To the worker in a poor
country the demand of his more fortunate colleague to be pro-
tected against his low wage competition by minimum wage
legislation, supposedly in his interest, is frequently no more than
a means to deprive him of his only chance to better his conditions
by overcoming natural disadvantages by working at wages lower
than his fellows in other countries. And to him the fact that
he has to give the product of ten hours of his labour for the
product of five hours of the man elsewhere who is better equipped
with machinery is as much “ exploitation ” as that practised by
any capitalist.

It is fairly certain that in a planned international system the
wealthier and therefore most powerful nations would to a very
much greater degree than in a free economy become the object
of hatred and envy of the poorer ones : and the latter, rightly or
wrongly, would all be convinced that their position could be
improved much more quickly if they were only free to do what
they wished. Indeed, if it comes to be regarded as the duty of
the international authority to bring about distributive justice
between the different peoples, it is no more than a consistent and
inevitable development of socialist doctrine that class strife
would become a struggle between the working classes of the
different countries.

There is at present a great deal of muddle-headed talk about
“ planning to equalise standards of life ”. It is instructive to
consider in a little more detail one of these proposals to see what
precisely it involves. The area for which at the present moment
our planners are particularly fond of drawing up such
schemes is the Danube Basin and South-Eastern Europe. There
can be no doubt about the urgent need for amelioration of,
economic conditions in this region, from humanitarian and

1 68 THE ROAD TO SERFDOM

economic considerations as well as in the interest of the future
peace of Europe, nor that this can be achieved only in a political
setting different from that of the past. But this is not the same
thing as to wish to see economic life in this region to be directed
according to a single master plan, to foster the development of
the different industries according to a schedule laid down before-
hand in a way which makes the success of local initiative dependent
on being approved by the central authority and being incorporated
in its plan. One cannot, for example, create a kind of “ Tennessee
Valley Authority ” for the Danube Basin without thereby deter-
mining beforehand for many years to come the relative rate of
t progress of the different races inhabiting this area, or without
subordinating all their individual aspirations and wishes to this
task.

Planning of this kind must of necessity begin by fixing an order
of priorities of the different claims. To plan for the deliberate
equalisation of standards of living means that the different claims
must be ranked according to merit, that some must be given
precedence over others, and that the latter must wait their turn —
even though those whose interests are thus relegated may be con-
vinced, not only of their better right, but also of their ability to
reach their goal sooner if they were only given freedom to act
on their own devices. There exists no basis which allows us to
decide whether the claims of the poor Rumanian peasant are
more or less urgent than those of the still poorer Albanian, or the
needs of the Slovakian mountain shepherd greater than those of
his Slovenian colleague. But if the raising of their standards of
life is to be effected according to a unitary plan, somebody must
deliberately balance the merits of all these claims and decide
between them. And once such a plan is put into execution, all
the resources of the planned area must serve that plan — there can
be no exemption for those who feel they could do better for
themselves. Once their claim has been given a lower rank, they
will have to work for the prior satisfaction of the needs of those
who have been given preference. In such a state of affairs
everybody will rightly feel that he is worse off than he might be
if some other plan had been adopted, and that it is the decision
and the might of the dominant powers which have condemned
him to a place less favourable than he thinks is due to him. To
attempt such a thing in a region peopled by small nations, each
of which believes,, equally fervently in its own superiority over
the others, is to undertake a task which can be performed only
by the use of force. What it would amount to in practice is that
British decisions and British power would have to settle whether
t the standards of the Macedonian or the Bulgarian peasant should
be raised faster, whether the Czech or the Hungarian miner

THE PROSPECTS OF INTERNATIONAL ORDER 169

should more rapidly approach Western standards. It does not
need much knowledge of human nature, and certainly only a little
knowledge of the people of Central Europe, to see that whatever
the decision imposed, there will be many, probably a majority,
to whom the particular order chosen will appear supreme injustice,
and that their common hatred will soon turn against the power
which, however disinterestedly, in fact decides their fate.

Though there are no doubt many people who honestly believe
that if they were allowed to handle the job they would be able
to settle all these problems justly and impartially, and who would
be genuinely surprised to find suspicion and hatred turning
against them, they would probably be the first to apply forcf
when those whom they mean to benefit prove recalcitrant, and
to show themselves quite ruthless in coercing people in what is
presumed to be their own interests. What these dangerous
idealists do not see is that where the assumption of a moral
responsibility involves that one’s moral views should by force be
made to prevail over those dominant in other communities, the
assumption of such responsibility may place one in a position in
which it becomes impossible to act morally. To impose such
an impossible moral task on the victorious nations is a certain
way morally to corrupt and discredit them.

By all means let us assist the poorer people as much as we can
in their own efforts to build up their lives and to raise their
standards of living. An international authority can be very just
an'd contribute enormously to economic prosperity if it merely
keeps order and creates conditions in which the people can develop
their own life ; but it is impossible to be just or to let people
live their own life if the central authority doles out raw materials
and allocates markets, if every spontaneous effort has to be
“ approved ” and nothing can be done without the sanction of the
central authority.

*****

After the discussions in earlier chapters it is hardly necessary to
stress that these difficulties cannot be met by conferring on the
various international authorities “ merely ” specific economic
powers. The belief that this is a practical solution rests on the
fallacy that economic planning is merely a technical task, which
can be solved in a strictly objective manner b^ experts, and that
the really vital things would still be left iji the hands of the
political authorities. Any international economic authority, not
subject to a superior political power, even if strictly confined to
a particular field, could easily exercise the most tyrannical and
irresponsible power imaginable. Exclusive control of an essential
commodity or service (as, for example, air transport) is in effect

170 THE ROAD TO SERFDOM

one of the most far-reaching powers which can be conferred
on any authority. And as there is scarcely anything which
could not be justified by “ technical necessities ” which no out-
sider could effectively question — or even by humanitarian and
possibly entirely sincere arguments about the needs of some
specially ill-favoured group which could not be helped in any
other way — there is little possibility of controlling that power.
The kind of organisation of the resources of the world under
more or less autonomous bodies, which now so often finds favour
in the most surprising quarters, a system of comprehensive
monopolies recognised by all of the national governments, but
subject to none, would inevitably become the worst of all con-
ceivable rackets — even if those entrusted with their administration
should prove the most faithful guardians of the particular interests
placed in their care.

One need only seriously consider the full implications of such
apparently innocuous proposals, widely regarded as the essential
basis of the future economic order, such as the conscious control
and distribution of the supply of essential raw materials, in order
to see what appalling political difficulties and moral dangers they
create. The controller of the supply of any such raw material
as petrol or timber, rubber or tin, would be the master of the fate
of whole industries and countries. In deciding whether to allow
the supply to increase and the price or the income of the producers
to fall, he would decide whether some country is to be allowed
to start some new industry or whether it is to be precluded from
doing so. While he “ protects ” the standards of life of those
he regards as specially entrusted to his care, he will deprive many
who are in a much worse position of their best and perhaps only
chance to improve it. If all essential raw materials were thus
controlled there would indeed be no new industry, no new venture
on which the people of a country could embark without the
permission of the controllers, no plan for development or improve-
ment which could not be frustrated by their veto. The same is
true of international arrangement for “ sharing ” of markets and
even more so of the control of investment and the development
of natural resources.

It is curious to observe how those who pose as the most hard-
boiled realists, and who lose no opportunity of casting ridicule on
the “ utopianism ” of those who believe in the possibility of an
international political order, yet regard as more practicable the
much more intimate and irresponsible interference with the lives
of the different peoples which economic planning involves ; and
believe that, once hitherto undreamed-of power is given to an
international government, which has just been represented as not
even capable of enforcing a simple Rule of Law, this greater power

THE PROSPECTS OF INTERNATIONAL ORDER 171

will be used in so unselfish and so obviously just a manner as to
command general consent. If anything is evident it should be
that, while nations might abide by formal rules on which they have
agreed, they will never submit to the direction which international
economic planning involves — that while they may agree on the
rules of the game, they will never agree on the order of preference
in which the rank of their own needs and the rate at which they are
allowed to advance is fixed by majority vote. Even if, at first, the
peoples should, under some illusion about the meaning of such pro-
posals, agree to transfer such powers to an international authority,
they would soon find out that what they have delegated is not
merely a technical task, but the most comprehensive power ovey
their very lives.

What is evidently at the back of the minds of the not altogether
unpracticable “ realists ” who advocate these schemes is that,
while the great Powers will be unwilling to submit to any superior
authority, they will be able to use those “ international ” authori-
ties to impose their will on the smaller nations within the area
in which they exercise hegemony. There is so much “ realism ”
in this that by thus camouflaging the planning authorities as
“ international ” it might be easier to achieve the condition under
which international planning is alone practicable, namely, that it
is in effect done by one single predominant power. This disguise
would, however, not alter the fact that for all the smaller states it
would mean a much more complete subjection to an external power,
to which no real resistance would any longer be possible, than
would be involved in the renunciation of a clearly defined part of
political sovereignty.

It is significant that the most passionate advocates of a centrally
directed economic New Order for Europe should display, lik^-
their Fabian and German prototypes, the most complete disregard
of the individuality and of the rights of small nations. The
views of Professor Carr, who in this sphere even more than in
that of internal policy is representative of the trend towards
totalitarianism in this country, have already made one of his
professional colleagues ask the very pertinent question : “ If
the Nazi way with small sovereign states is indeed to become the
common form, what is the war about ? ” 1 Those who have
observed how much disquiet and alarm some recent utterances
on these questions in papers as different as The Times and the
New Statesmen 2 have caused among our smaller Allies will have

1 Professor C. A. W. Manning, in a review of Professor Carr’s Conditions of
Peace in the International Affairs Review Supplement, June 1942.

2 It is significant in more than one respect that, as was recently observed in

one of the weekly journals, “ one had already begun to expect a touch of the
Carr flavour in the New Statesman pages as well as in those of The Titties
(“ Four Winds ” in Time and Tide, February 20, 1943). , ’

THE ROAD TO SERFDOM

172

little doubt how much this attitude is even now resented among
our closest friends, and how easy it will be to dissipate the stock
of goodwill which has been laid up during the war if these
advisers are followed.

# # # * *

Those who are so ready to ride roughshod over the rights of
small states are, of course,, right in one thing : we cannot hope
for order or lasting peace after this war if states, large or small,
regain unfettered sovereignty in the economic sphere. But this
does not mean that a new super-state must be given powers which
yre have not learnt to use intelligently even on a national scale,
that an international authority ought to be given power to direct
individual nations how to use their resources. It means merely
that there must be a power which can restrain the different
nations from action harmful to their neighbours, a set of rules
which defines what a state may do, and an authority capable of
enforcing these ndes. The powers which such an authority
would need are mainly of a negative kind : it must above all be
able to say “ no ” to all sorts of restrictive measures.

Far from its being true that, as is now widely believed, we
need an international economic authority while the states can at
the same time retain their unrestricted political sovereignty,
almost exactly the opposite is true. What we need and can hope
to achieve is not more power in the hands of irresponsible inter-
national economic authorities, but, on the contrary, a superior
political power which can hold the economic interests in check,
and in the conflict between them can truly hold the scales, because
it is itself not mixed up in the economic game. The need is for
an international political authority which, without power to direct
the different people what they must do, must be able to restrain
them from action which will damage others. The powers which
must devolve on an international authority are not the new
powers assumed by the states in recent times, but that minimum
of powers without which it is impossible to preserve peaceful
relationships, i.e. essentially the powers of the ultra-liberal
“ laissez-faire ” state. And even more than in the national
sphere, it is essential that these powers of the international
authority should be strictly circumscribed by the Rule of Law.
The need for such a super-national authority becomes indeed
greater as the individual states more and more become units
of economic administration, the actors rather than merely the
supervisors of the economic scene, and as therefore any friction
is likely to arise not between individuals but between states as
such.

The form of international government under which certain

THE PROSPECTS OF INTERNATIONAL ORDER 1 73

strictly defined powers are transferred to an international author-
ity, while in all other respects the individual countries remain
responsible for their internal affairs, is, of course, that of federa-
tion. We must not allow the numerous ill-considered and often
extremely silly claims made on behalf of a federal organisation
of the whole world during the height of the propaganda for
“ Federal Union ” to obscure the fact that the principle of
federation is the only form of association of different peoples
which will create an international order without putting an undue
strain on their legitimate desire for independence . 1 Federalism

is, of course, nothing but the application to international affairs
of democracy, the only method of peaceful change man has
yet invented. But it is a democracy with definitely limited
powers. Apart from the more impracticable ideal of fusing
different countries into a single centralised state (the desirability
of which is far from obvious) it is the only way in which the
ideal of international law can be made a reality. We must not
deceive ourselves that in calling in the past the rules of inter-
national behaviour international law we were doing more than
expressing a pious wish. When we want to prevent people from
killing each other we are not content to issue a declaration that
killing is undesirable, but we give an authority power to prevent

it. In the same way there can be no international law without
a power to enforce it. The obstacle to the creation of such an
international power was very largely the idea that it need command
all the practically unlimited powers which the modern state
possesses. But with the division of power under the federal
system this is by no means necessary.

This division of power would inevitably act at the same time
also as a limitation of the power of the whole as well as of the
individual state. Indeed many of the kinds of planning which
are now fashionable would probably become altogether im-
possible . 2 But it would by no means constitute an obstacle to
all planning. It is, in fact, one of the main advantages of federa-
tion that it can be so devised as to make most of the harmful
planning difficult while leaving the way free for all desirable
planning. It prevents, or can be made to prevent, most forms
of restrictionism. And it confines international planning to the
fields where true agreement can be reached — not only between the

1 It is a great pity that the flood of federalist publications which in recent
years has descended upon us has deprived the few important and thoughtful
works among them of the attention they deserved. One which in particular
ought to be carefully consulted when the time comes for the framing of a new
political structure of Europe is Dr. W. Ivor Jennings’s small book on A Federa-
tion for Western Europe (1940).

* See on this the author’s article on “ Economic Conditions of Inter-State
Federation ”, The New Commonwealth Quarterly , vol. V, September 1939 -

174 THE R0AD T0 SERFDOM

“ interests ” immediately concerned, but among all those affected.
The desirable forms of planning which can be , effected locally
and without the need of restrictive measures, are left free and in
the hands of those best qualified to undertake it. It is even to
be hoped that within a federation, where there will no longer
exist the same reasons for making the individual states as strong
as possible, the process of centralisation of the past may in some
measure be reversed and some devolution of powers from the
state to the local authorities become possible.

It is worth recalling that the idea of the world at last finding
peace through the absorption of the separate states in large
federated groups and ultimately perhaps in one single federation,
f^r from being new, was indeed the ideal of almost all the liberal
thinkers of the nineteenth century. From Tennyson, whose
much quoted vision of the “ battle of the air ” is followed by
a vision of the federation of the people which will follow their
last great fight, right down to the end of the century the final
achievement of a federal organisation remained the ever-recurring
hope of a next great step in the advance of civilisation. Nine-
teenth-century liberals may not have been fully aware how essential
a complement of their principles a federal organisation of the
different states formed 1 ; but there were few among them who
did not express their belief in it as an ultimate goal. 2 It was only
with the approach of our twentieth century that before the
triumphant rise of Realpolitik these hopes came to be regarded
as unpracticable and utopian.

# * * * *

We shall not rebuild civilisation on the large scale. It is no
accident that on the whole there was more beauty and decency
to be found in the life of the small peoples, and that among the
large ones there was more happiness and content in proportion
as they had avoided the deadly blight of centralisation. Least of
all shall we preserve democracy or foster its growth if all the
power and most of the important decisions rest with an organisa-
tion far too big for the common man to survey or comprehend.
Nowhere has democracy ever worked well without a great measure
of local self-government, providing a school of political training
for the people at large as much as for their future leaders.

1 See on this Professor Robbins’s already quoted book, pp. 240-57.

2 As late as the closing years of the nineteenth century Henry Sidgwick
thought it “ not beyond the limits of a sober forecast to conjecture that some
future integration may take place in the West European states : and if it should
take place, it seems probable that the example of America will be followed,
and that the new political aggregate will be formed on the basis of a federal
polity ” (The Development of European Polity , published posthumously in
i$° 3 , P- 439 )-

THE PROSPECTS OF INTERNATIONAL ORDER 175

It is only where responsibility can be learnt and practised in
affairs with which most people are familiar, where it is the aware-
ness of one’s neighbour rather than some theoretical knowledge
of the needs of other people which guides action, that the
ordinary man can take a real part in public affairs because they
concern the world he knows. Where the scope of the political
measures becomes so large that the necessary knowledge is almost
exclusively possessed by the bureaucracy, the creative impulses
of the private person must flag. I believe that here the experience
of the small countries like Holland and Switzerland contains
much from which even the most fortunate larger countries like
Great Britain can learn. We shall all be the gainers if we can
create a world fit for small states to live in. J

But the small can preserve their independence in the inter-
national as in the national sphere only within a true system of
law which guarantees both that certain rules are invariably
enforced and that the authority which has the power to enforce
these cannot use it for any other purpose. While for its task of
enforcing the common law the super-national authority must be
very powerful, its constitution must at the same time be so
designed that it prevents the international as well as the national
authorities from becoming tyrannical. We shall never prevent
the abuse of power if we are not prepared to limit power in a
way which occasionally may also prevent its use for desirable
purposes. The great opportunity we shall have at the end of
this war is that the great victorious powers, by themselves first
submitting to a system of rules which they have the power to
enforce, may at the same time acquire the moral right to impose
the same rules upon others.

An international authority which effectively limits the powers
of the state over the individual will be one of the best safeguards
of peace. The international Rule of Law must become a safe-
guard as much against the tyranny of the state over the individual
as against the tyranny of the new super-state over the national
communities. Neither an omnipotent super-state, nor a loose
association of “ free nations ”, but a community of nations of free
men must be our goal. We have long pleaded that it had become
impossible to behave in international affairs as we thought it
desirable because others would not play the game. The coming
settlement will be the opportunity to show that we have been
sincere and that we are prepared to accept the same restrictions
on our freedom of action which in the common interest we think
it necessary to impose upon others.

Wisely used, the federal principle of organisation may indeed
prove the best solution of some of the world’s most difficult
problems. But its application is a task of extreme difficulty arid

X76 THE KOAD TO SERFDOM

we are not likely to succeed if in an over-ambitious attempt we
strain it beyond its capacity. There will probably exist a strong
tendency to make any new international organisation all-
comprehensive and world-wide ; and there will, of course, be
an imperative need for some such comprehensive organisation,
some new League of Nations. The great danger is that, if in
the attempt to rely exclusively on this world organisation it is
charged with all the -tasks which it seems desirable to place in
the hands of an international organisation, they will not in fact
be adequately performed. It has always been my conviction
that such ambitions were at the root of the weakness of the
League of Nations : that in the (unsuccessful) attempt to make it
\Vorld-wide it had to be made weak, and that a smaller and at
the same time more powerful League might have been a better
instrument to preserve peace. I believe that these considerations
still hold and that a degree of co-operation could be achieved
between, say, the British Empire and the nations of Western
Europe and probably the United States which would not be
possible on a world scale. The comparatively close association
which a Federal Union represents will not at first be practicable
beyond perhaps even as narrow a region as part of Western
Europe, though it may be possible gradually to extend it.

It is true that with the formation of such regional federations
the possibility of war between the different blocs still remains,
and that to reduce this risk as much as possible we must rely
on a larger and looser association. My point is that the need
for some such other organisation should not form an obstacle
to a closer association of those countries which are more similar
in their civilisation, outlook, and standards. While we must
aim at preventing future wars as much as possible, we must
not believe that we can at one stroke create a permanent organisa-
tion which will make all war in any part of the world entirely
impossible. We should not only not succeed in such an attempt,
but we should thereby probably spoil our chances of achieving
success in a more limited sphere. As is true with respect to
other great evils, the measures by which war might be made
altogether impossible for the future may well be worse than even
war itself. If we can reduce the risk of friction likely to lead to
war, this is probably all we can reasonably hope to achieve.

CONCLUSION

THE purpose of this book has not been to sketch a detailed
programme of a desirable future order of society. If with regard
to international affairs we Ijave gone a little beyond its essentially
critical task, it was because in this field we may soon be
called upon to create a framework within which future growth
may have to proceed for a long time to come. A great deal will
depend on how we use the opportunity we shall then have. But
whatever we do, it can only be the beginning of a new, long, and
arduous process in which we all hope we shall gradually create
a world very different from that which we knew during the last
quarter of a century. It is at least doubtful whether at this stage
a detailed blueprint of a desirable internal order of society would
be of much use — or whether anyone is competent to furnish it.
The important thing now is that we shall come to agree on certain
principles and free ourselves from some of the errors which have
governed us in the recent past. However distasteful such an
admission may be, we must recognise that we had before this war
once again reached a stage where it is more important to clear
away the obstacles with which human folly has encumbered our
path and to release the creative energy of individuals than to
devise further machinery for “ guiding ” and “ directing ” them —
to create conditions favourable to progress rather than to “ plan
progress The first need is to free ourselves of that worst form
of contemporary obscurantism which tries to persuade us that
what we have done in the recent past was all either wise or inevit-
able. We shall not grow wiser before we learn that much that
we have done was very foolish.

If we are to build a better world we must have the courage
to make a new start — even if that means some reculer pour ntieux
sauter. It is not those who believe in inevitable tendencies who
show this courage, not those who preach a “ New Order ” which
is no more than a projection of the tendencies of the last forty
years, and who can think of nothing better than to imitate Hitler.
It is indeed those who cry loudest for the New Order who are
most completely under the sway of the ideas which have created
this war and most of the evils from which we suffer. The young
are right if they have little confidence in the ; ideas which rule
most of their elders. But they are mistaken or misled when
they believe that these are still the liberal ideas of the nineteenth
century, which in fact the younger generation hardly knows.
Though we neither can wish, nor possess the power, to go back
to the reality of the nineteenth century, we have the opportunity

177

178 THE ROAD TO SERFDOM

to realise its ideals — and they were not mean. We have little
right to feel in this respect superior to our grandfathers ; and
we should never forget that it is we, the twentieth century, and
not they, who have made a mess of things. If they had not yet
fully learnt what was necessary to create the world they wanted,
the experience we have since gained ought to have equipped us
better for the task. If in the first attempt to create a world of
free men we have failed, we must try again. The guiding
principle, that a policy of freedom for the individual is the only
truly progressive policy, remains as true to-day as it was in the
nineteenth century.

BIBLIOGRAPHICAL NOTE

The exposition of a point of view which for many years has been
decidedly out of favour suffers from the difficulty that, within the compass
of a few chapters, it is not possible to discuss more than some aspects
of it. For the reader whose outlook has been formed entirely by the
views that have been dominant during the last twenty years this will
scarcely be sufficient to provide the common ground required for profit-
able discussion. But although unfashionable, the views of the author
of the present book are not so singular as they may appear to some
readers. His basic oudook is the same as that of a steadily growing
number of writers in many countries whose studies have led them
independently to similar conclusions. The reader who would like to
acquaint himself further with what he may have found an unfamiliar
but not uncongenial climate of opinion, may find useful the following
list of some of the more important works of this kind, including several
in which the essentially critical character of the present essay is supple-
mented by a fuller discussion of the structure of a desirable future
society. The earliest and still the most important of these works is that
by L. v. Mises, originally published in 1922.

W. H. Chamberlin. A False Utopia. Collectivism in Theory and
Practice. (Duckworth) 1937.

F. D. Graham. Social Goals and Economic Institutions. (Princeton

University Press) 1942.

E. Halevy. L’Ere des Tyrannies. Paris (Gallimard) 1938. English

versions of two of the most important essays in this volume will be
found in Economica, February 1941, and in International Affairs,
1934-

G. Halm, L. v. Mises, and others. Collectivist Economic Planning,
ed. by F. A. Hayek. (Routledge) 1937.

W. H. Hutt. Economists and the Public. (Cape) 1935.

W. Lifpmann, An Inquiry into the Principles of the Good Society.
(Allen & Unwin) 1937.

L. v. Mises. Socialism, trsl. by J. Kahane. (Cape) 1936.

R. Mura. Liberty and Civilisation. (Cape) 1940.

M. Polanyi. The Contempt of Freedom. (Watts) 1940.

W. Rappard. The Crisis of Democracy. (University of Chicago Press)
1938.

L. C. Robbins. Economic Planning and International Order. (Mac-
millan) 1937.

L. C. Robbins. The Economic Basis of Class Conflict and Other Essays
in Political Economy. (Macmillan) 1939.

L. C. Robbins. The Economic Causes of War. (Cape) 1939.

W. Roepke. Die Gesellschaftskrisis der Gegemvart. Zurich (Eugen
Rentsch) 1942.

L. Rougier. Les mystiques dconomiques. Paris (Librairie Medicis) 1938.

F. A. Voigt. Unto Caesar. (Constable) 1938.

The following of the “ Public Policy Pamphlets ” edited by the
University of Chicago Press —

H. Simons. A Positive Program for Laissez-Faire. Some Proposals for

a Liberal Economic Policy. 1934.

H. D. Gideonse. Organised Scarcity and Public Policy. 1939.

F. A. Hermens. Democracy and Proportional Representation. 194°-

179

l8o THE ROAD TO SERFDOM

W, Sulzbach. “ Capitalist Warmongers ” : A Modern Superstition.
1942.

M. A. Heilperin. Economic Policy and Democracy. 1943.

There are also important German and Italian works of a similar
character which, in consideration for their authors, it would be unwise
at present to mention by name.

To this list I add the titles of three books which more than any others
known to me help one to understand the system of ideas ruling our
enemies and the differences which separate their minds from ours,

E. B. Ashton. The Fascist, His State and Mind. (Putnam) 1937.

F. W. Foerster. Europe and the German Question. (Sheed) 1940.
H. Kantorowicz. The Spirit of English Policy and the Myth of the

Encirclement of Germany. (Allen & Unwin) 1931.

L and that of a remarkable recent work on the modem history of Germany
which is not as well known in this country as it deserves :

F. Schnabel. Deutsche Gescliichte im 19. Jahrhundert. 4 vols.
Freiburg, i. B. 1929-37.

Perhaps the best guides through some of our contemporary problems
will still be found in the works of some of the great political philosophers
of the liberal age, a de Tocqueville or Lord Acton, and, to go even farther
back, Benjamin Constant, Edmund Burke, and the Federalist papers of
Madison, Hamilton, and Jay, generations to whom liberty was still a
problem and a value to be defended, where ours at the same time takes it
for granted and neither realises whence the danger threatens nor has the
courage to emancipate itself from the doctrines which endanger it.

SOURCES OF QUOTATIONS AT THE HEAD
OF CHAPTERS

Introduction :
Chapter I :

>>

ii

»

III :

IV :

V:

»

»

it

a

VI :
VII :
VIII :
IX :

ft

it

it

X :
XI :
XII :

XIII :

XIV :

1 it

XV:

Lord Acton, History of Freedom and other Essays, p. 62.
F. D. Roosevelt, Message to Congress, April 29, 1938.
F. Hoelderlin, Hyperion I, 1 (Werke, Insel Ausgabe,
p. 456).

E. Halevy, L’Ere des Tyrannies, p. 208
B. Mussolini, Grand Fascist Council Report, 1929.

A. Smith, Wealth of Nations, Bk. IV, chpt. II, ed.

Cannan, vol. I, p. 421.

K. Mannheim, Man and Society, p. 180.

H. Belloc, The Servile State, 3rd ed., p. 11.

Lord Acton, History of Freedom and Other Essays, p. 57.
V. I. Lenin, State and Revolution, “ Little Lenin
Library ” ed., p. 78.

L. Trotsky, The Revolution Betrayed, p. 76.

Lord Acton, Historical Essays and Studies, p. 504.

E. H. Carr, Twenty Years Crisis, p. 172.

A Moeller van den Bruck, Das Dritte Reich, quoted
after R. D. Butler, The Roots of National Socialism,
p* 260.

The Times, Feb. 24, 1940, First Leader.

J. Milton, Ready and Easy Way to Establish a Free
Commonwealth ( Aeropagitica and other Prose Works,
Everyman edition, p. 181).

Lord Acton, The History of Freedom and other Essays,
p. 98.

INDEX

Acland, R., 144, 157
Acton, Lord, i, io, 52, 76, 100,
107, 136, 163
Altruism, 44
Antisemitism, 104, 137
Ashton, E. B., 63 n.

Austria, 2, 16, 85, 104

Balilla, 85

Beamtenstaat, 98, 132
Bebel, A., 125 n.

Becker, K., 117 n.

Belloc, H., io n., 66
Benda, J., 142 seq.

Bill of Rights, 63

— of attainder, 62 n.

Bismarck, O. v., 125, 129-32, 136
“ Blindness ” of competition, 77
Book Clubs, 85 n.

Borkenau, F., 105 n.

Bourgeoisie, nn., 125
Brady, R. A., 142 n.

Bright, J., 10
Bruening, H., S3
Burckhardt, J., 107
Burnham, J., 77 n.

Butler, R. D., 124, 129 n.

Carlyle, T., s, 124, 160
Carr, E. H., 106 n., 114, 13S-41,
171

Cartels, 34

Cecil, Lord, 139

Central Europe, 64, 102, 167 seq.

Chamberlain, H. S., 5, 124

Chamberlin, W. H., 21

Chase, S., 16

Cicero, io

Clark, C., 73 n.

Class struggle h rebours, 87

, international, 104, 167

Cobden, R., 10
Collectivism: definition, 24
Colonial development, 166 n.
Commerce, n, no
Competition, 27-31, 76 et seqq.
Competitive socialism, 30 n.
Comte, A., 12, 124
Concentration camps, 112, 157 n.

— of industry, 32 seq.
Consumption, control of, 69 seq.

Contract, Rule of, 58
Corporate State, 30
Corporations, Law of, 28
Coyle, D. C., 94

Creed, necessity of common, 85,
88, chapter X passim.

Cripps, S., so
Crowther, J. G., 121, 143
Czechs, 107, 168

Darling, Mr. Justice, 62
Delegated legislation, 48 seq.

De Man, H., 87 n.

Democracy, chapter V passim, 100
seq., 148, 173, r 74
Dewey, J., 19 n.

Dicey, A. V., 54 m, 136
Dictatorship, 50 seq., 66, 100
Discrimination, 59, 65, 70 seqq.
Disraeli, B., 80, 160
Distribution of Income, 78 seqq.
Donoughmore Committee (Report),
47-9

Dopolavoro, 85
Drucker, P., 21, 118 n.

Du Bois-Reymond, E., 142

Eastman, M., 20 seq., 77 n., 78
Economist, The, 64
Economophobia, 1^1
Edelnazis, 133
Egotism, 44, 158
End, single, 42

Ends, individual and social, 44
Engels, F., 107

Engineering technique applied to
society, 15, 93
Equality, 82 seqq.

— , formal and substantive, 59
— of opportunity, 76 seq.~
Erasmus, D., io
Ethical Code, see Moral Code
Exchange Control, 69 n.

Fabians, 106, 135, 171
Fair Wages, 83
Fairness, 58

Federation, 172 seqq., 176
Feiler, A., 81 n.

Fichte, J. G., 125 seq.
Fluctuations, industrial, 90 seq., 96
181

182

INDEX

Foreign correspondents, 6 n.
Formal Rules, 55-61, 171
France, 64, 141
Franklin, B., 99
Freedom, economic, 75, 91 seq.

— , Change of meaning of term, 19,
1 17 seq., 140
— , “ collective,” 117

— of thought, 122 seq.

Free Trade, 17, 140
Freirechtsschule, 59 n

Freizeitgestaltung, 73
Freyer, H., 131 n.

Fried, F., 133

“ Full Employment ”, 153
“ — Produce of Labour ”, 83

Germany, antisemitism in, 163 seq.
— , democracy in, 50
— , intellectual influence on Eng-
land, 2, 16, 135 seqq., 148

— leads in modem economic and

political development, 1 seq.,
34. 97

— , liberalism in, 23
— , monopoly in, 34 seq.

— , national income, share con-
. trolled by government, 43
— , rule of law in, 54 n., 61 seq.

— , socialism in, 2, 16, chapter XII
passim.

Gestapo, 112

Gladstone, W. E., 106, 136, 160
Gleichschaltung, 114
Goering, H., 129
Goethe, J. W., 5
Grossraumwirtschaft, 141, 166

Hal6vy, E., 24, 50, 106, 179
Hanse Towns, no
Hardenberg, F. v., 7
Hardenberg, K. A. v., 13 1
“ Have Not ” nations, 108
Hegel, G. W. F., 16, 127, 138, 140
Heimann, E., 22
Heines, ioo
Herrenvolk, 166
Hewart, Lord, 62
Heydrich, ioo
H ighway Code, 56
Himmler, H., ioo‘

Historical laws, 1, 142 seq., 177
Hitler, A., 2, 4, 22 seq., 50, 56, 61,
128, 137, 141, 157 seq., 177
Hitlerjugend, 85
Hoelderlin, F., 19

Holland, 12, 159, 175
Humboldt, W. v., 13 i
Hume, D., 10
Hutt, W. H., 92 n.

Incentives, 67, 92 seqq.

India, 6 n.

Individual Rights, 64
Individualism, 10, 44, 123
Intelligibility of Social Forces, 121
Investment, Control of, 170
Italy, 5, 9, 12, 35, 62, 85, 102, 1 12,
161

Jaff£, E., 136
Janet, P., 19
Jennings, W. I., 173 n.

Jews, 103, 1 16, 137, 142 n.

Journal for Marxist-Leninist
Natural Science, 120
Journal of the National Socialist
Association of Mathematicians,
120

JUENGER, E., 13 1 n.

Just Price, 83

Justice, distributive, 74, 81 seq.,
165, 167

— , formal and substantive, 59
Kant, I., 61

Keynes, Lord, 133 n., 136
Killinger, M., v., ioo
Knight, F. H., 113 n.

Kolnai, A., 13 1 n.

Kraft durch Freude, 85
Kulaks, 103

Labour Party, 47, 147 seq.

— service, 95

Laissez-faire, 9, 13, 27, 60, 75, 139,
140

Lange, O., 108 n.

Laski, H. J., 46 seq., 98, 148 seq.
Lassalle, F., 125 seq.

Laval, P., 21
Law, formal, 59 seq.

— and Freedom, 61 seq.

— , international, 173

See also Rule of law
League of Nations, 176
Legislation, Limits of, 62
Lenin, V. I., 20, 80, 89, 133 n.
Lennard, R., 120
Lensch, P., 129 seq.

Leviathan, 141 n.

Lewis, W. A., 146 n.

INDEX

Ley, R., ioo

Liberalism, Principles of, io, 13
seqq., 27, 60
Liberty, see Freedom
Lippincott, B. E., 107 n.
Lippmann, W., 21
List, F., 17
Locke, J., io, 62

Long-run character of liberal
policy, 61

Macaulay, T. B., 160
Mackenzie, F., 106 n.

Macmillan Report, 9 n.

Maine, H., 59

Mannheim, K., 15 seq., 51, 54,
117

Manning, C. A. W., 171 n.

Maex, K., 16, 78, 107, 138, 140
Marxism, 23 n., 32, 86, 120, 125
seqq., 142, 144

Means and ends, 24 seq., 44, 115
Michels, R., 22 n.

Middle class, dispossessed, 87, 155

socialism, 87 seq., 144

“ Middle Way ”, 31
Military type of society, 94, 98,
no

Mill, J. S., 5, 84, 160
Milton, J., 10, 150, 157, 160
Minimum standards, 89, 156

— wages, 167
Minorities, 51, 64 seq., 78
Moeller van den Bruck, A., 124,

13 1 seq.

Money, 67

Monopoly, 69, chapter IV passim,
140, 14s seqq.

Montaigne, M. de, 10
Moral basis and effects of col-
lectivism, chapter X passim,
150 seq.

— code, 43 seqq., 115 seqq.

— standards, 150 seqq.

Morley, Lord, 5 n., 126, 160
Mosley, O., 5°

Motor roads, 96

Motives (economic or pecuniary),

67

Muggeridge, M., 81 n.
Mussolini, B., 22, 32, 35, 117
Myths, 1 16 seq.

Napoleon, 131
Nationalism, 103 seqq.

Nature , 143

183

Naumann, F., 129
New Order, 128, 171
Nicolson, H., 135
Niebuhr, R., 34, 106
Nietzsche, F., 105 n.

Novalis, 7

Occupation, choice of, 64, 70 seqq.,
91

OSTWALD, W., 129

Papen, F. V., 50
Particularism, 103 seqq.

Patents, 28
Percy, E., 50
Pericles, io

Planning, meaning of, 25 seq.
Plato, i 17, 136
Plenge, J., 127 seqq.

“ Plenty, potential ”, 73, 140, 143,
150

Poles, 107
Pound, E., 161 n.

Power, 19, 77 seq., 107 seq., 112,
144 n.

Predictability of state action, 54
seqq.

Pribram, K., 133 n.

Price system : conditions of func-
tioning, 27 seq.

Prices : determination under com-
petition, 70
Priestley, J. B., 144
Privilege, 14, 59 seq., 88, 89, 92, 97,
148

Propaganda, 4, 112, 114 seq., 139,
160 seq.

Property, private, 28, 60, 76 seq.
Protection : effects in Germany, 34,
129

— in Great Britain and U.S.A., 34
Prussianism, 6 seq., no, 132
Public utilities, 35

— works, 91

Quisling, V. 21

Raison d’dtat, 109
Ratkenau, W., 129 ■

Raw materials, 164 seq., 170
Realism, historical, 138
Rechtsstaat, 54 n., 58 seq.
Renaissance, 10 seq., 143
Rentier, 146 n.

Restrictionism, 95 seq., 173
Rights of Man, 63

INDEX

184

Risk, 75, 88, 94, 97
Robbins, L. C., 33, 67, 164, 174
Rodbertus, K., 1 25 seq.

Roepke, W., 94
Roosevelt, F. D., 8
Rule of Law, chapter VI passim,
108, 170, 172, 175
Russell, B., 107

Russia, 9, 16, 21, 62, 77, 80, 105,
1 12, 1 19 seq.

r

Sabotage, 119
Saint-Simon, C. H. de, 18
Scheler, M., 133 n.

L , Schleicher, v., 50

Schmitt, C., 59 n., 131 n., 132 n.,
139

SCHMOLLER, G., l6

Schnabel, F., 141
Science, 120
Scientists, 21, 119
Security, chapter VIII passim.
Shaw, G. B., 106 seq.

Sidgwick, H., 136, 174 n -
Social insurance, go
— services, 28
Socialism : definition, 24 seq.
Sombaht, W., 16, 34, 125 seq.
Sorel, G., 1 17, 124
Sovereignty, 172
Spann, O., 13 i n.

Specialists, 93 seqq.

Spectator, The, 31 n.

Spengler, O., 131 seq.

Stalinism, 20

Standards of life, differences, 167

, security of, 89, 96

Standardisation, 38, 72, 84
State interference, 60
Status, rule of, 59
Stewart, D., 25 n.

Streicher, I., 100
Substantive Rules, 55
Sweden, 2

Switzerland, 159, 175

Tacitus, 10
Taylor, F. M., 108
Technological change, 32 seqq.,

9 1

Temporary National Economic
Committee, 33

Tennessee Valley Authority, 168
Tennyson, A., 174
Thucydides, 10
Timis, The, 135, 171 n.
Tocqueville, A. de, 10, 18, 19
Totalitarianism: definition, 42
Toynbee, A. B., 139
Trade unions, 153
Treitschke, H. v., 135
Trotsky, L., 77, 89
Truth, chapter XI passim.

Unemployment, 79 seq., 90, 96,
153 seq.

United States of America, 34, 36,
73 n., 147

Virtues, individualist and social,
no

Voigt, F. A., 21
Voltaire, F. M. A. de, 61

Waddington, C. H., 143 seq.

War, 2, 64, 141, 153, 176
Webb, S. and B., 63 seq., 106,
1 19 seq., 160

Welfare, social or common, 46, 63,
72. 83

Wells, H. G., 63 seq., 127, 160
Western Civilisation, 10, 17, 101
White race, 166 n.

Wieser, G., 85 n.

Wilcox, C., 33
Wilson, W., 139
World parliament, 166 n.

Youth Movement, 133